Despite a number of threats and some even greater challenges Bermuda retains its place at the heart of the international insurance community—for now. But it must remain innovative and keep fighting just to stand still.
Much has been written of late about Bermuda’s position as an insurance and reinsurance domicile against the context of the wider world. A proliferation of companies setting up operations in European jurisdictions such as Switzerland and Ireland has led to speculation that the market is losing its competitive edge.
There is no doubt that Bermuda does face some big issues. But most observers still believe the island retains its place at the heart of the reinsurance industry for now—its challenge is to maintain this position against a backdrop of regulatory change, growing competition from other domiciles and the island’s own socio-economic problems.
Bermuda’s regulatory issues represent a double-edged sword at the moment. Its immediate task is to secure equivalency as a regulator when Solvency II is introduced in 2013. The Bermuda Monetary Authority’s (BMA) efforts have gained the island—along with Japan and Switzerland—inclusion in the first wave of countries to be assessed for regulatory equivalence, an accolade seen as essential to shield Bermuda companies from having a potential competitive disadvantage in the European market.
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Bermuda, Reinsurance, Insurance, Bermuda Monetary Authority, Zurich, Aon Benfield, Association of Bermuda Insurers and Reinsurers, Guy Carpenter, Solvency II