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4 October 2024ArticleRe/insurance

Diversity and innovation: the hallmarks of captives

The formation of the Bermuda Captive Network is evidence of the sector’s ability to work together, says Grainne Richmond, BCN president.

The last 18 months have been a pivotal time for the Bermuda captive insurance industry, marked by continued resilience, innovation, and growth. We are proud to have launched our newly revitalised membership programme, the Bermuda Captive Network (BCN), which has seen our network grow  stronger, our reach expanded and Bermuda’s position as a leading domicile for captive insurance reinforced. The BCN looks forward to further achievements and developments in the year ahead, with the support of our strong membership base.

Bermuda’s leadership in the captive insurance space dates back to the 1960s when it became the birthplace of the modern captive. Over the past several decades, Bermuda has not only maintained its position as a global leader but has continuously adapted to meet the evolving needs of  businesses worldwide.

Today, Bermuda is home to more than 1,200 insurers, with 653 of those classified as captives under the Limited Purpose Regime, writing over $31 billion in gross premiums annually. Our market’s expertise and infrastructure are unparalleled, offering companies a stable, compliant, and innovative environment for their risk management needs.

Greater accessibility

The past three years have been particularly noteworthy as we’ve seen a diverse range of new captives formed in Bermuda, along with strong growth in our existing client base. The profile of these captives and growth in the market reflects the adaptability and forward-thinking nature of Bermuda’s insurance industry. From healthcare providers navigating post-COVID-19 pandemic challenges to tech companies managing cyber risks, Bermuda has been the domicile of choice for companies seeking tailored, sophisticated solutions.

Large multinational corporations continue to dominate captive formations, but we are also witnessing a growing interest from mid-sized enterprises eager to harness the advantages captives offer. This trend underscores the growing accessibility and relevance of captives for a wider spectrum of businesses. 

At the heart of Bermuda’s success is our unique combination of regulatory excellence, talent, and industry support. The Bermuda Monetary Authority (BMA) remains a beacon of robust yet proportionate regulation, balancing rigorous oversight with the flexibility needed for captives to thrive.

Bermuda’s commercial insurance regulatory regime is among a select few outside the EU to achieve Solvency II equivalence and is recognised by the US National Association of Insurance Commissioners as a qualified jurisdiction. This regulatory pedigree gives companies the confidence that Bermuda is a secure and transparent domicile that can meet the highest global standards. 

Innovation has been a defining feature of Bermuda’s captive insurance market in recent years. Companies are increasingly using captives to address emerging risks and explore new insurance 

structures. The flexibility of Bermuda’s regulatory regime has enabled captives to expand their lines of business, particularly in areas such as cyber risk, environmental liability, and employee benefits.

The BMA’s willingness to engage with the industry on emerging risks such as legalised cannabis and digital assets demonstrates Bermuda’s readiness to remain at the forefront of global insurance solutions. 

A global reach

The formation of the BCN has been instrumental in driving our market forward. By unifying the Bermuda Insurance Managers Association, Bermuda Captive Owners Association, and Bermuda Captive Conference, the BCN has strengthened our industry’s voice and broadened our reach. Our mission is clear: to enhance advocacy, foster collaboration, and promote the continued growth and diversification of Bermuda’s captive market.

Through international outreach, valuable data analytics, and industry events, we are ensuring that Bermuda’s advantages are recognised worldwide.

As we look ahead, the next five years will be important in shaping the future of Bermuda’s captives industry. The implementation of the new Corporate Income Tax Regime in 2025, aligned with OECD guidelines, is testament to Bermuda’s commitment to transparency and global tax standards. This move positions our jurisdiction as a compliant, forward-thinking market that businesses can trust.

In closing, I extend my gratitude to all those who contribute to the strength and vibrancy of Bermuda’s captive insurance market—our service providers, regulators, and industry  stakeholders. As we move forward, I am confident that Bermuda will continue to lead the way, offering innovative solutions, a stable regulatory environment, and unmatched expertise to businesses seeking to manage risk effectively.

The future is bright for Bermuda, and together, we will continue to build on our legacy as a world-class domicile for captives.  

Grainne Richmond is president of the Bermuda Captive Network and executive vice president and head of captives at Aon Bermuda. To find out more about the BCN, visit bermudacaptivenetwork.com

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