Bermuda has a long history of global trade and disruptive innovation. Our location and ability to innovate quickly played a pivotal role in the early days of trade in the founding of the New World, just as it does today.

Our focus on disruption and innovation led to playing a leading role in many innovations of trade and commerce over the years.

We were pioneers in shipbuilding, tourism, reinsurance and now fintech. Understanding the opportunity for the future really requires appreciating our successes in the past.

Bermuda played a unique role in early trade in the Atlantic. Old-style, square-rigged ships were not terribly efficient and thus they tended to sail with the wind.

This was advantageous for early settlers of Bermuda. To our south, trade winds blow to the west, while to the north, trade winds blow to the east. In his book, In the Eye of All Trade, Michael Jarvis outlines the key role Bermudians had to play in early trade.

The flows of the trade winds in the Atlantic meant Bermuda was uniquely positioned such that it was actually more efficient to sail from one island in the Caribbean out to Bermuda and then back than it was to sail between the islands directly.

This garnered Bermuda the opportunity to be an intermediary destination of trade between early settlements in the New World. Rather than having to sail back to Europe, ships could stop in Bermuda, shortcutting trade routes.

Bermuda then became a disrupter and leader in Atlantic trade as the dynamic winds of our harbours and challenges of navigating our reefs led us to innovate.

The invention of the Bermuda rig, the triangular-shaped sail configuration that dominates modern sail configurations, drastically changed the sailing landscape.

Bermuda sloops and Bermudians became well-known facilitators of trade in the New World, as we sailed directly between jurisdictions leveraging our game-changing innovation.

More recently, Bermuda innovated to become the world’s leading offshore reinsurance domicile.

We became a key locale for the development of the global reinsurance industry through the progressive approaches undertaken by our government of the day, our regulator and the fledgeling industry.

We took a risk-management approach to developing the industry while leveraging our small size, flexibility and close partnership with industry to respond quickly to industry needs.

This allowed the industry to grow while having the support of a regulator and government who understood the challenges of managing the risks of a new industry.

Today, reinsurance is a highly respected global industry. However, it wasn’t always that way. In the early days, the thought of companies being created to make bets on whether disaster would strike was repulsive to many.

Bermuda’s people have never had much of a fondness for gambling, and the idea of allowing specially created companies to gamble on catastrophes was not an easy sell.

Even Brian Duperreault, a highly respected industry titan, admits in a recent talk at the Miami Business School that dealing in reinsurance means he’s effectively a professional gambler.

The early days of the industry weren’t easy, either. The risks were unknown and unquantified, which meant it was very common for whole classes of reinsurance companies to get wiped out when catastrophes occurred to which they had too much exposure.

However, each catastrophe brought new opportunity and new businesses.

As Mr Duperreault suggested at a Bermuda Business Development Agency executive forum last November, success attracted success, as did the quality of the regulations, people, infrastructure and support.

Over the years, reinsurance has matured.

The risks have become more well known and the industry has become very well respected and renowned for the value it delivers.

When a catastrophe such as an earthquake or hurricane hits somewhere on the globe, Bermudian reinsurance firms often have a hand in providing the funds to recover and rebuild.

Bermuda plays a key role, not just in providing an environment for innovation but also facilitating global trade.

The efficient allocation of global capital that allows money to be pooled from around the globe to be ready for when disaster strikes.

Our environment allows money to be raised from, say, Florida and Japan and be reallocated to either if a hurricane strikes, leveraging the knowledge that catastrophes don’t all strike the globe at the same time.

This is far more efficient and effective than regions attempting to insure against catastrophes alone.

Bermuda acts as an intermediary of global capital flows between nations while eliminating barriers to trade, much like we did in the days of the tall ships. Thus, we need to recognise our place both historically and now as an intermediary of global trade to understand what value we have to offer in the future.

We also need to recognise that what really made Bermuda innovative enough to capture the reinsurance industry was our willingness to move quickly to create a well-regulated environment in which risk-taking businesses could grow.

Taking a pioneering role in embracing and developing an industry around modern financial technology entails many risks, many of those unknown.

The challenge is in carefully managing which risks we are willing to take to ensure we foster growth and support of this fledgeling industry.

This while maintaining the high-standard global reputation for transparency and global regulatory compliance that we have developed to be the world’s offshore risk capital.

The path to success with embracing and encouraging innovation in financial technology, or fintech, are to repeat the strategy that worked in the past. We need to be cognisant of the risks of disrupting our existing industry but recognise that we can again respond quickly to industry needs while striving for the highest global standard of transparency and regulations.

We need to closely examine how we can leverage our strengths to best accelerate the industry while managing the related risks.

Thus far, Bermuda has made great strides in being a leader in the development of regulatory frameworks around this new industry, having launched comprehensive legislation in the summer of 2018.

A key factor is that Bermuda has set a very high bar and standard for our regulations.

It shouldn’t be about saying we can’t do it or shouldn’t do it.

If we had given in to those who said we shouldn’t be in insurance because it’s effectively gambling, then we never would have built our place in the global insurance industry and never would have demonstrated the tremendous world value it adds.

Similarly, we shouldn’t say we can’t or shouldn’t do fintech. Instead, we need to adapt quickly, learn from our mistakes and refine our processes to ensure we maintain the kind of high standard that legitimate businesses in the industry need to prosper.

Bermuda has a long history of global trade and disruptive innovation. Our location still plays a role in being far more accessible and desirable for doing business in the North American and European markets.

We need to stay focused on innovation and on creating the right environment in which business can thrive.

We have managed to reinvent ourselves numerous times over to foster new industries. We just need to look to and appreciate our successes in the past for guidance on how we can seize opportunity for the future.

• Denis Pitcher is a Bermudian tech entrepreneur with an interest in exploring the potential of blockchain and distributed ledger technologies for Bermuda. He is a fintech consultant to the Bermuda Government’s fintech Business Unit as well as a tech cofounder and chief architect of resQwest.com, a global tourism technology solutions provider. He can be reached at mail@denispitcher.com