Bermuda expects more captive formations from Canadian companies in the coming years, as several years of building relationships in that market come to fruition. That is according to Jereme Ramsay, business development manager (risk solutions) at the Bermuda Business Development Agency (BDA).
Ramsay was speaking at the Bermuda Captive Conference (WC June 11) ahead of an executive forum the BDA has organised in Toronto, Ontario, next week. The forum was designed to bring companies together with Bermuda industry, regulatory and government stakeholders to explore and educate on all aspects of how Bermuda can be a domicile of choice for everything from risk solutions to asset management.
Two captives were formed by Canadian companies in Bermuda last year, and there is a healthy pipeline of companies exploring the possibility of establishing a captive on Bermuda, he said. He anticipates more formations in 2019, but also warns that the process can be a lengthy one.
Bermuda is also seeing more inquiries about forming captives as a result of hardening rates in many lines of business, Ramsay said. “People are looking at all options to better manage risk,” he said. “They are looking to better leverage existing captives and form new ones. Those conversations are taking place and when they look at where to form a captive Bermuda always comes high up that list.”
Captives are increasingly being used to manage new forms of risk, he added. More captives are being used for cyber risk, while two captives were formed in Bermuda last year to manage long-term life-related risks.
Ramsay also anticipates the imminent formation of the first captive to manage cannabis-related risks, which could involve a company based in Canada, where the drug is now legal.
Ramsay said: “It is a complex one, but it is just a case of getting the right parties involved. Bermuda has always been renowned for innovation and I think once we get one over the line it will set a precedent for others to follow. Many of the big captive managers are looking at this and it is only a matter of time before a deal gets done.”
Bermuda, Canada, Bermuda Business Development Agency