28 March 2013Actuarial & underwriting

Bermuda world’s largest captive domicile by numbers

Bermuda is the world’s largest domicile by number of active captives, reporting a total of 856 at the end of 2012.

According to statistics obtained from insurance company statutory financial returns in 2011 by the Bermuda Monetary Authority (BMA), Bermuda’s captive sector wrote $20.3 billion in gross premiums and reported total assets of $85.3 billion. Reported capital and surplus was $42.1 billion.

Shelby Weldon, director of licensing and authorisations at the BMA, said: “Bermuda’s insurers continue to write significant volumes of premiums and hold substantial amounts of both assets and capital and surplus.

“The volume of business being written here and the quality of our firms show that Bermuda remains one of the world’s premier insurance domiciles.”

He said that the captive market in Bermuda was becoming more competitive, and continues to attract business: “We are continuing to see new captive business choosing to locate here, based on our experience, both in terms of the practical regulatory environment and professional service providers on the ground catering to captives, as well as unparalleled access to a sophisticated reinsurance market.”

The BMA announced that there are no current plans to implement a Solvency II-style regime to the jurisdiction’s captive insurance market.

It reported the 27 new special purpose insurers (SPIs) as a driver for the 53 new insurer registrations in the domicile in 2012.

“Having put in place the regulatory framework for SPIs in 2009, we are pleased to see initial interest now translating into active business,” Weldon added.

“The total volume of new ILS issued globally in 2012 was $6.4 billion with $2.5 billion, or 40 percent, of this total being sponsored by Bermuda-registered SPIs. Overall, SPIs provide another alternative risk transfer option which builds upon Bermuda’s longstanding expertise in this area. The jurisdiction is committed to servicing this growing segment of the market,” he said.