Bermuda-based expertise, recent regulatory changes and Bermuda (re)insurance market developments among other factors, all suggest that Bermuda’s dominance as a captive domicile of choice will continue into the foreseeable future.
Captives, for those who may not know, are insurance companies established to cover the risks of a related company or companies. For example, this newspaper’s owner, The Bermuda Press (Holdings) Ltd may seek to cover risks relating to defamation, for example, through its own insurance company rather than using another local or overseas insurance company. It may choose to do so if the costs of set up, regulatory environment and running costs are favourable relative to the cost of insuring through existing carriers – or it may do so for a variety of other reasons. In reality, captive structures range in complexity from as simple as the above example to those that are far more complicated.
This summer’s Bermuda Captive Conference was testament to Bermuda’s leading position within the global captive market. As noted in the recently published Bermuda Business Development Agency press release following the conference, Bermuda is home to nearly 800 captive insurance companies, supporting primarily Fortune 500 corporations in the US, and generating more than $48bn in annual gross written premiums.
Bermuda is also diverse in that it plays host to a growing number of captives from Latin America and Asia and other regions around the globe.