Still the world’s premier domicile

Quality captives writing quality business

According to the latest available statistics from Bermuda’s integrated financial services regulator the Bermuda Monetary Authority (BMA), as of December 31, 2020, captive insurer gross premiums written held firm year-on-year at approximately $40 billion.

Bermuda is committed to transparency and regulatory excellence, and the BMA offers quality, risk-based supervision for captives.

Bermuda has some of the world’s oldest, continuously active captives. Each year new entrants are added to the Bermuda Captive Conference’s captive hall of fame for continuously writing business out of the same entity for over 20 years. These stalwarts of the captives industry continue to write business in Bermuda because we remain the world’s risk capital.

Convenient location

Bermuda’s captives market is unique in that it is also one of the world’s largest commercial re/insurance markets, rivalled only by New York and London, and the largest alternative capital/ILS markets, all in one convenient location.

Bermuda’s total re/insurance market is made up of over 1,200 re/insurers holding total assets of over $980 billion and writing gross premium of approximately $240 billion.

The Association of Bermuda Insurers and Reinsurers (ABIR) said Bermuda re/insurers have paid $209 billion to US policyholders and cedants, and $72.8 billion to EU policyholders and cedants, during the past 20 years. With a specialisation in property catastrophe re/insurance, ABIR members have contributed over $65 billion for US catastrophe losses between the years 2001 to 2017 ($30 billion in 2017 alone for hurricanes Harvey, Irma and Maria).

Bermuda also has a robust long-term (life) insurance market writing approximately $120 billion in net premiums and holding approximately $500 billion in total assets.

In addition to commercial re/insurance, Bermuda is the global leader in ILS issuances with over 400 ILS—including catastrophe bonds—listed on the Bermuda Stock Exchange, which amounts to 80 percent of global ILS issuances.

Despite disruptions from the global pandemic, in 2020 Bermuda licensed 72 new re/insurance entities, including 12 new captive insurers. During the opening months of 2021 we are also seeing a good level of interest in new formations, including captives.

Bermuda is certainly a one-stop shop for all your risk transfer needs but our market could never have evolved over the decades the way it has—from captives; to re/insurance; to alternative capital—without a spirit of innovation and experimentation which is deeply engrained in our ways of doing business.

Innovation is in our DNA

Bermuda is often referred to as the Silicon Valley of the Atlantic, a re/insurance laboratory where new risk transfer services and concepts can be beta-tested.

We have an innovation-friendly financial services regulator in the form of the BMA. It faced the challenge of encouraging innovation head-on by creating a regulatory sandbox for companies seeking to test out new tech, or business models, in a controlled environment, for a limited period of time. The BMA has also created an innovation hub for entities that are not yet ready for the sandbox, or that are still developing their business models.

Bermuda is nimble. Unlike larger domiciles, we can make the requisite legislative and regulatory changes to make innovation happen very quickly. This nimble approach is supported by the Bermuda Business Development Agency (BDA) which acts as a conduit between government, the regulator, and industry.

Bermuda’s captives market is diversified and does not specialise in any one particular line of business but rather a variety of property, casualty and long-term business types. For example, in 2020 the world’s first captive to insure crypto custody was set up on the Island.

Ever since Fred Reiss first came here to do business 60 years ago, Bermuda has established an unparalleled bench strength when it comes to having captive insurance experts on the ground, all conveniently located in one location, just a 90-minute direct flight from New York and six hours from London. This diversification in the lines of business being written and human capital makes innovation easy to accomplish here.

There isn’t a better place to find experts to assist you in the formation of complex, sophisticated, bespoke captive insurance solutions for your risk transfer needs.

CONNECTING BUSINESS The BDA encourages direct investment and helps companies start up, re-locate or expand their operations in our premier jurisdiction. An independent, public-private partnership, we connect you to industry professionals, regulatory officials, and key contacts in the Bermuda government to assist domicile decisions. Our goal? To make doing business in Bermuda smooth and beneficial.

Roland Andy Burrows is chief executive officer of the Bermuda Business Development Agency. He can be contacted at: info@bda.bm