The Bermuda economy is improving, according to government figures: is that a reflection of how international business is performing?

The international business sector, of which financial services is a big part, is an important contributor to Bermuda’s economic output. The steady growth in GDP seen in 2015 is attributed to growth in the international business sector: we’ve seen that in terms of the number of incorporations. In fact, there has been steady growth in the number of formations since 2009/10 – and it was still holding up in 2015.

Insurance and reinsurance is still the biggest contributor in terms of jobs and economic output and that sector has been sustained by activity in the ILS and collateralised reinsurance business. It’s become a strong growth area for Bermuda with 75% of ILS transactions completed in 2015 taking place here. Appleby, which has played a significant role in the ILS sector acted on about two-thirds of Bermuda’s ILS transactions, including the majority of Bermuda’s collateralised reinsurance (or ‘cat bond lite’) transactions.

What strengths does Bermuda play to in the current re/insurance market environment?

In the case of ILS, it has gained traction partly because of the lack of alternatives available to institutional investors who have found traditional investment products less attractive. The re/insurance market has responded to this demand by developing structures that make the link between capital and risk more transparent, fuelling growth. Bermuda has a long record for producing innovative, effective solutions. In today’s market, people come to Bermuda to create alternative risk structures because there is the support and strong regulatory oversight they need to succeed.

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