A bulletin from the Bermuda Monetary Authority (BMA) confirmed that the island had “recorded a three-year high for (re)insurance company incorporations during 2006, with an almost 10 percent increase in the number of new (re)insurance companies incorporated in the jurisdiction over 2005.”
The report notes that “a total of 82 new (re)insurers were established in Bermuda in 2006. The majority of these new companies were large, highly capitalized reinsurers. Captive insurance companies also formed a significant proportion of the new incorporations.
“The 82 new Bermuda incorporations for 2006 compare very favorably with figures recorded by other jurisdictions such as Vermont, which had 37, South Carolina with 29 and the Cayman Islands with 50.”
“We are very pleased to see this significant increase in the number of new (re)insurance companies in Bermuda,” stated Jeremy Cox, BMA’s Supervisor of Insurance. “This is a clear indication of the continued confidence the market has in Bermuda as a leading global insurance and reinsurance center, and the practical, effective regulatory framework in place here.”
He added that Bermuda “recognized the continued significance of the captive market as core business for the jurisdiction and remained focused on maintaining its leadership position as a captive domicile. There is a collective recognition and commitment to the fact that captives remain a key element of the mix of high quality (re)insurance business conducted in Bermuda.
“For example the BMA is very supportive of initiatives such as the Bermuda Captives Conference, and being part of Bermuda’s presence at other international events focused on captive business,” Cox continued. “However it is good to see that overall Bermuda continues to be a very attractive domicile and good business choice for large commercial reinsurers and captives, as well as the primary market.”
The bulletin singled out Ironshore Ltd., the latest big operation to be admitted as a Class 4 company, Bermuda’s highest regulatory category. In addition the BMA cited the “wave of reinsurance companies from the UK, including Hiscox Re, Omega Re and Amlin Re, that selected Bermuda as their base during the year.”
“From a licensing perspective, it certainly has been a very busy year and of course I am happy to see the final numbers surpass those of 2005,” noted Shanna Lespere, Deputy Director at the BMA and head of the Licensing and Authorization team within the Insurance Department.
“The continued interest and increase overall in captives as well as the commercial reinsurance companies adds to the strength of the Bermuda market,” she continued. “Over the past year on the captive side we have continued to see interest surrounding Bermuda’s servicing of the healthcare industry, as well as renewed interest in employee benefit program solutions.
“On the commercial side, it was no surprise that the most significant trend of the year related to the formation of a number of sidecars, which entered the market to take advantage of capacity gaps in the property and catastrophe arena. Even in the early part of 2007 we continue to see interest in this area,” Lespere added.
“However,” she continued, “I believe that the jurisdiction’s success is highlighted in not just the number of incorporations, but also the high quality of the sponsors behind these companies, as well as the continued increases in premium volume written we have been recording over the years.”
Statistics for 2005, the latest available, show a total of $100.7 billion gross premiums written by the Bermuda market, compared to $95.3 billion the previous year.
Topics Reinsurance
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