Bermuda hangs on to top captive domicile spot
The Bermuda Monetary Authority (BMA) has released new figures showing that Bermuda held on to its global position as the leading captive domicile with the most active captive licenses.
According to the BMA the Island had 776 on its register as of December 31, 2016. This includes 13 new captives which joined in 2016. The majority of these came from the US, although two new captives came from the emerging markets of Latin America.
“The Authority continues to ensure that Bermuda’s captive sector – which has made significant contributions to Bermuda’s economy for well over 50 years – remains appropriately regulated,” said Craig Swan, managing director, supervision, at the BMA.
"The global companies that operate captives from Bermuda expect top quality regulatory standards. As such, the Authority ensures that its supervisory framework for captives, has remained aligned with the Insurance Core Principles of the International Association of Insurance Supervisors.”
According to Jereme Ramsay, business development manager of the Bermuda Business Development Agency (BDA) Bermuda captives wrote $55.3 billion at the latest count, which more than quadruples the posted premiums in the closest competing domiciles.
Ramsay added: "Additionally, we are seeing increasing interest from emerging markets such as Central and South America, where, not coincidentally, the BDA has been focusing business development efforts over the past year. Following targeted trips to Mexico and Chile led by the BDA, a new captive from Mexico and the first ever captive from Chile incorporated on the island.”
Captives are becoming popular as wealth preservation vehicles for high net worth individuals and family offices from this region, Ramsay suggested.
Of the 776 captives registered in Bermuda there were 225 Class 1 licenses, 280 Class 2 licenses, 255 Class 3 licenses, and 8 Class A and 8 Class B licenses.
Ross Webber, CEO of the BDA, commented: "The Bermuda Monetary Authority figures reaffirm Bermuda's status as global leader in the captive insurance market, with more overall captives registered than any other jurisdiction.
"It's important to note that Bermuda held its number-one position atop captive domiciles despite challenging market conditions that have reduced the year-over-year global total of captives registered.
Webber added that Bermuda’s captive market had seen numerous mergers, acquisitions and consolidations, where corporations had taken cost-cutting steps to integrate multiple captives into single vehicles, a trend which affecting all markets.
"The BDA plans to continue to lead aggressive business development efforts overseas, particularly in Latin America, Canada, and relevant regions across the United States, where the majority of Bermuda captive formations originated, Ramsay added.
Ramsay concluded: "We'll continue to educate corporate markets about what sets Bermuda apart-its premier regulatory reputation, for example, and its commercial re/insurance sector that offers captive owners and operators access to open-market underwriting capacity. It is these advantages that make Bermuda such a highly attractive one-stop-shop."
