Ratings Firm A M Best Names Bermuda As Top Captives Domicile

by Lisa Ugur, Tax-news.com, London

26 April 2001

Bermuda has been rated the number one location for captive insurance operations, according to US-based insurance rating and information group A M Best, which has reported a rise of more than 30 per cent in captive formations for the year 2000 in the world's key captive centres.

A M Best data shows steady growth rates for captive insurance companies - between 4.5 per cent and 5.5 per cent over the past several years - with an acceleration in growth in 2000. Regulators and other independent sources in the various captive domiciles indicate that during the course of last year 245 new captives were licensed, while 170 were liquidated.

According to Best's Captive Directory 2001 Edition, Bermuda now holds 31.5 per cent of the world's total captive market of 4,458 captives. Last year saw the formation of 51 new captives.

Whilst Bermuda topped the tables, the Cayman Islands appear to be playing catch-up. Last year in the Caymans 48 new captives were set up, bringing the total in that jurisdiction to 535, although Bermuda has a much higher total number of captives (1,405).

Also featuring in the A M Best ratings of new captive formations were Guernsey, with 24 new captives in 2000, Luxembourg with 10, Barbados with 9, the British Virgin Islands with 42, Ireland with 9 and the Isle of Man with 2.

A M Best said the market for captives will continue to grow in 2001, due to a continued firming trend in prices in commercial lines, and in spite of pressures from a deteriorating stock market and regulatory authorities. The company said in a statement that hot issues and emerging trends in the worldwide captive market as indicated in the Best's Captive Directory 2001 include accelerated growth in Europe and Asia and greater transparency in offshore captives.

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