Bermudian Captive Market Booming Smith Tells ICAP

by Amanda Banks, Tax-News.com, London

05 June 2003

Speaking at the seventh annual International Captives Congress in Bermuda recently, Premier Jennifer Smith told risk managers that the island was maintaining its position as one of the world's leading insurance centres, and that it was continuing to experience a boom in the captive sector.

According to Mrs Smith, by the end of last year there were 1,641 international insurance companies registered in the jurisdiction which represents a 39% increase over the previous year. Of these, around 50% were captive insurers. According to the Bermudian Premier, indications show that in 2003 those numbers are likely to "increase significantly."

The Premier told delegates that: "As the world’s leading captive jurisdiction, I believe that Bermuda can play a pivotal role in meeting your needs for protection and for positively influencing your bottom line,” adding that the island's reputation as a well regulated and reputable financial centre was “unrivalled”.

“Our monitoring, supervision and regulations are above reproach because Bermudians do not wish to be associated with any unsavoury business practices,” Smith announced, continuing: “we certainly support efforts to clamp down on illegitimate business activity.”

Mrs Smith also referred to the recent scrutiny of offshore financial centres by international institutions such as the OECD and the IMF, from which Bermuda emerged with its reputation intact. The IMF in particular, found that regulatory standards in the island's insurance industry were above international standards, she observed.

A recent report by the Bermuda Monetary Authority would seem to bear out Mrs Smith's claims with regard to the recent growth of the jurisdiction's insurance industry. Figures show that the value of net premiums earned in Bermuda in 2001 amounted to $41.6 billion, whilst gross premiums before factoring in reinsurance stood at $49 billion. As of December 31, 2001, capital and surplus equalled $65.8 billion with total assets hitting a record level of $172.6 billion. Also, some $26.6 billion in new assets were accumulated during 2001.

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