BMA Hails Jump In Insurance Registrations

October 13, 2011

Jeremy Cox bsxInsurance company registrations in Bermuda have picked up dramatically, boosted primarily by a rise in special purpose insurers.

The latest figures released by the Bermuda Monetary Authority [BMA] show that 31 insurance companies have been registered in Bermuda so far this year.

This represents a 30 percent increase year-on-year for the seven-month period to July 31, 2011, and is set to exceed the 36 insurance companies registered during the full year of 2010.

BMA CEO Jeremy Cox [pictured] told the international financial website “Tax News” this week: “The area where we are seeing the largest single increase is in the Special Purpose Insurers (SPI) class. We have already seen 12 new SPIs registered this year. This compares to eight SPI registrations for the whole of 2010.”

The majority of the new SPIs — insurance entities that conduct special purpose business for a specific period of time — were formed in relation to the record-setting level of global catastrophes experienced during the first half of 2011.

According to Mr. Cox, altering the island’s regulatory framework to accommodate SPIs in 2009 has resulted in the translation of market interest in these vehicles to a larger number of registrations being made. “For example, it was exciting to see the board of the California Earthquake Authority (CEA), the state’s quasi-governmental residential earthquake insurer, approve a $150 million catastrophe bond issue via a Bermuda SPI, Embarcadero Re.

“The choice of a Bermudian reinsurer for this latest CEA catastrophe bond issue was a departure from previous normal practice for them, and a positive indication that markets — seeking quality supervision — remain confident in Bermuda.”

Insurance registrations to date are also reflecting new business in both the captive and commercial insurance sectors of the Bermuda market, according to Shelby Weldon, the BMA’s director of Insurance, Licensing and Authorization. “Compared to 2010, Bermuda has also seen a rise in the level of Class 3 and Class 3A insurers being registered here. Five of each has already been registered up to July 2011. This compares to the four Class 3s and two Class 3As that were newly registered in total last year,” he said.

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Comments (18)

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  1. Johnny Guard says:

    Where are the naysayers now? I thought IB was leaving in the droves???

    • Can't Take It Anymore says:

      Mind if I throw some stones just kicks???

      According to the OBA/UBP supporters and their erratic, strange, and possibly falsified numbers (where did they come from again…..thats right, they never said) this was on the decline and due to Premier Paula Cox’s decision makings no insurance company wanted to stay in Bermuda. But look at the above! My guess is that no one will comment. If they do as a result of my comment, then there might be some name calling and bashing in their response. May get a few educated response though (hopefully)! Or they will probably drop the old ‘who did they pay now’ comment. Knowing that is strictly opinion, they will try and pass it off as fact. But both sides are guilty of that.

  2. Waiting Patiently says:

    LOL this article was posted how long ago? and you are already whining that no one has replied? it hasnt even been an hour eh?

    anyways.. a couple questions..

    1)how does the number of new registrations compare to the number of companies leaving?

    2)How many jobs are actually being created in bermuda, vs these registrations being nothing more than a anecdotal “PO Box”?

    • Waiting Patiently says:

      if its all good news then its all good news, but there are certain forces around that can take any statistics and filter out any bad, turning “an inconvenient truth into a reassuring lie” as was recently quoted.

      Cant say for sure here, its just worthy to keep a skeptical mindset at this point.

    • Can't Take It Anymore says:

      Does #1 really matter if the numbers are up all together? Regardless of how many are leaving becasue there is obviously more registering than they are leaving. And t opoint out, they are not leaving, merely relocating their head office to another country and those numbers are very low. And while doing that, they are still keepin their Bermuda operations in business.
      #2, if they have just been created, then the actual jobs being created will not be known till next year after they have grown in capital and overall business altogether.

      • Can't Take It Anymore says:

        To be a little more clear, i was referring to insurance and reinsurance companies concerning #1.

      • Waiting Patiently says:

        lol #1 very much does matter. if last year 3 registered and 3 left or unregistered, and then this year 5 registered but 6 left.. it makes a huge difference.

        if those numbers are very low, why are so many people losing jobs and leaving hte island?

        2) yeah those jobs will not have been known..exactly. Its the same reason no one should praise from the rooftops whenever some foreign investor signs up to build a hotel… because it doesnt really mean anything at the moment.

        yes its nice to hear that they’ve registered, no doubt, but this is hardly a description of the entire picture.

      • Waiting Patiently says:

        remember, tourist numbers are “up all together”… doesnt mean its a good or useful thing.

    • Johnny Guard says:

      The fact that OBA states that Government is scaring away companies by policy etc, yet more companies are coming here than last year proves that the policies are not a deterrent

      Now to answer your questions:

      1) Not sure, however even if they posted the numbers of companies that left, unless they state the reasons why the companies redomiciled one cannot assume it was due to Government policies/term limits. Could be for other reasons that are beyond Government Policy i.e shareholders etc..

      2) No one knows, however it shows that Bermuda is still attracting IB Companies.

  3. 32n64w says:

    The incorporation of a SPI does automatically equate to the addition of new jobs.

    Typically they are just entities managed by an existing company for a specific purpose.

  4. shaco says:

    The category of Special Purpose Insurer is a new one and it shows how Bermuda and the BMA have created an insurance product in response to what the market wants. I applaud this and hope that they continue to find innovative solutions to make Bermuda attractive. From what I understand, the SPI category has been very successful thus far. Note that a SPI is not a type of insurance entity which would have a physical office here i.e. employing Bermudians. To “waiting patiently”- the drove of insurance companies we saw setting up in Bermuda in 2005 will probably not happen again. It’s not so much that Bermuda did “something wrong” (putting aside term limit arguments and the rest)but the market and the nature of the business has fundamentally changed- not to mention the events of 2008.

    I would like to see the funds and general corporate sphere “spruced up” so as to remain competitive.

  5. Shmegistrations... says:

    … it’s all about the J.O.B.’s!

    Hundreds have gone… How many have been created?

  6. InTheKnow says:

    Special Purpose Insurers (SPI) are principally companies that only exists on paper. Most of them operate as Cat Bond Issuers or Sidecars. They are 100% owned/funded by one of the big re/insurers who manage the SPI from current operations. Many SPI operate actively for less than one year. They usually go dormant after that, unless needed for that specific purpose again in the future.

    Very few (if any) full-time long-term positions were created. Some SPI might employ a captive manager at best.

  7. Triangle Drifter says:

    Wow! We are really scraping the bottom of the barrel for good news in IB arn’t we? A company that only occupies space in a filing cabinet is great news these days.

    How many currently empty apartments are these wonderful new to Bermuda companies going to occupy?

    • S Brown says:

      Ironic that there is an abundance of young people who recently graduated from Uni looking for apartments that would suit their budget.