BMI's Executive Summary

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This report differs from its predecessors in that it includes BMI's Insurance Business Environment Rating (IBER). The rating brings together a number of pieces of relevant quantitative data, together with BMI's Country Risk Rating (CRR). It is now much easier to consider the business environment for the insurance sector in any one country relative to the business environment for other industries in that country that are surveyed by BMI, and the business environment for the insurance sector in other countries.

With good reason, Bermuda's insurance industry describes the island as 'The World's Risk Capital'. One of the world's leaders in property/casualty (re)insurance and offshore captive insurance, the insurance sector writes annual premiums that are well in excess of US$100bn. Total assets at the end of 2005 amounted to around US$330bn.

The key feature of Bermuda is a combination of strengths – the lack of income tax, the first class regulatory regime, the proximity to North America and the development of a sufficiently large community of people with the requisite skills etc. – to give it a position that appears unassailable. Not for nothing does Bermuda account for 40% of the US property catastrophe coverage (among much else) and service well over 1,000 captive insurers. (The actual number of captives is difficult to define because many of these insurers are cell companies that service several different clients simultaneously through Rent-A-Captive programmes.)

Brad Kading, the president of the Association of Bermuda Insurers and Reinsurers (ABIR) notes: 'The US experience for the last 20 years has been that when there is a US capacity shortfall, in liability lines or in property catastrophe, Bermuda carriers are quickly able to assemble the capital and talent to fill the market gap. No jurisdiction has been as good as Bermuda in getting the needed capital to market quickly so that licensed insurers can assume …business risk.'

The nature of the (re)insurance business is such that there are often (or always) short-term threats from catastrophes, financial market volatility or unfavourable legal/tax changes in major markets (but, in particular, the US). This remains true, notwithstanding the fact that Bermuda's insurance companies are – after two very good years – in the happy position of having more capital than they need at a time that other global financial institutions have been facing problems. As noted in the above quote, the history of Bermuda's insurance sector has been one of long-term growth as companies have responded to short-term challenges.

The main problem that the sector faces is a potential lack of suitably skilled personnel. This is true for the (often highly specialised) captive insurance firms as well as the major (re)insurers.

CONTENTS

The Sector At A Glance

Table: Overview Of Bermuda's Insurance Sector

Key Insights Bermuda's Insurance Sector

SWOT Analysis

Bermuda Insurance Industry SWOT

Key Features Of This Report

Latest News

Projections And Forecasts

Table: Premium Growth – Historical Data And Forecasts

Projections And Drivers Of Growth

Table: Growth Drivers

Country Update

Table: Bermuda – Economic Data (US$bn unless otherwise stated)

Insurance Business Environment Ratings

Table: Bermuda – Insurance Business Environment Indicators

Table: Latin America And The Caribbean – Insurance Business Environment Rankings

Analysis Of Competitive Conditions

Country Overview – Bermuda

Table: Bermuda's Insurance Sector At A Glance, 2005

Table: Data On Members Of ABIR

Table: Financial Results For Selected Bermudian Insurance Entities, January-September 2007

Table: Premiums Written By Members Of ABIR Not mentioned Above, H107 (US$mn)

Table: Bermuda's Insurance Sector – Who Does What

Table: Bermuda's Insurance Sector – Who Does What.

Table: Bermuda's Insurance Sector – Who Does What

Table: Bermuda's Insurance Sector – Who Does What

Methodology

Basis Of Projections

Insurance Business Environment Rating

Table: Insurance Business Environment Indicators And Rationale

Table: Weighting Of Indicators

Competitive Landscape for Latin America Insurance Reports: Sample       of Companies Ranked

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A cross-border overview of key players and their insurance market share across Latin America. Tables and graphs show country presence of multinationals across the region. Comparative company analyses and rankings by premium income (life and non-life). Company SWOTS for leading life and non-life insurers, covering network of offices, presence of foreign stakeholders, strategic relationships, joint ventures; portfolio of clients; diversity of product range; profit growth, investment strategy and risk exposure.

Network of Insurance Sources

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BMI's Latin American Insurance Reports are based on an extensive network of multilateral organisations, government departments, insurance industry associations, chambers of commerce and company reports. Information sources include:

Read about our other Insurance Reports