Bermuda's 13 new captives in 2016 demonstrates the market's capability to offer a comprehensive set of risk management solutions in spite of markets remaining soft globally, according to law firm Conyers Dill & Pearlman.
The 13 new captives had come from the US, one of Bermuda's traditional markets, as well as the emerging Latin American market.
Of the 776 captives registered in Bermuda there are 225 Class 1 licenses, 280 Class 2 licenses, 255 Class 3 licenses, and 8 Class A and 8 Class B licenses.
The challenging conditions have been highlighted by ratings agency AM Best, who has reported that the global operating environment remains negative.
This outlook is influenced by continued low rates, broader terms and conditions, the unsustainable flow of net favourable loss development, and low investment yield which are expected to continue to limit risk-adjusted returns over the longer term.
Conyers suggested that in spite of this, disruptions in global markets have often led to important industry developments in Bermuda.
The law firm suggests one of Bermuda's advantages is its "sophisticated level of sensible yet firm regulation".
Example of this can be seen with the granting of full Solvency II equivalence to Bermuda by the European Parliament and Council, which came into effect on January 1, 2016.
This has guaranteed the Island will not be disadvantaged when writing business in the EU.
Similarly, the NACI has also granted Bermuda the status of a "Qualified Jurisdiction", which allows insurers – include captive insurers – domiciled here to be eligible for certification by a state as a certified reinsurer for reinsurance collateral reduction purposes.
As of January 1, 2016, Bermuda, France, Germany, Ireland, Japan, Switzerland, and the UK have been placed on the NAIC list of qualified jurisdictions.
Conyers Dill & Pearlman, Captives, Bermuda