Bermuda-Gibraltar cooperation possibilities could take some work

By David Fox

Gibraltar authorities may have a hard time convincing local government and business officials that there is a mutual commercial benefit to working together.

And the CEO of the Bermuda Business Development Agency (BDA), David Cash, conceded that while he was not against a working relationship with Gibraltar, he was not in a position to encourage it.

“We do not see this as being in competition with the Bermuda domicile, so we are not against it. But by the same token it is not for us to sell this idea for Gibraltar. That is something they will have to do themselves,” he said.

Gibraltar’s Financial Services Minister Albert Isola led an eight-person financial services contingent to Bermuda last week with an idea of mutual cooperation between the two British Overseas territories.

He emphasised that an offer of a Gibraltar domicile to subsidiaries of Bermuda insurers was not meant to be seen as competition to Bermuda, but as an alternative door to European business for Bermuda insurers.

Minister Isola said: “Gibraltar is offering Bermudian based- businesses that wish to operate in Europe our unique proposition, among the British Overseas Territories and Crown Dependencies, of access to the European Union single market via a Gibraltar insurance licence.”

Asked about the meetings, Mr Cash said he was happy to meet with the Minister and hear what he had to say.

“I did meet with Gibraltar on their visit last week and we did discuss the potential for Bermuda companies to use Gibraltar as a staging post into the European insurance market,” he said.

“The value proposition works best for business that can be underwritten online and so it does not present an alternative to being in London when it comes to London market business.

“To date the main insurance vehicles in Gibraltar have all been motor insurers selling into the UK over the internet [not a core business line for Bermuda companies].”

Mr Cash made the point that Bermuda does not compete directly with Gibraltar and he can see how they may want to establish relationships with Bermuda insurers and reinsurers to see how they do business in Europe.

He said: “If Bermuda were to work with Gibraltar, it wouldn’t mean taking business from Bermuda, just a different strategy for Bermuda companies doing business in Europe.

“A lot of this business involves brokers in London and using Gibraltar as an alternative might be difficult.

“And I think there are a limited number of cases where their mouse trap will be of interest to Bermuda companies.

“There are some things that may be genuinely interesting about Gibraltar, but it is the kind of thing that companies in Bermuda would have to make up their own minds about.

“There is no real BDA role in this, and probably no government role in this.”

The visiting Minister said upon arrival that he had hoped to work in close partnership with the Bermudian Government and the private sector on the Island.

His delegation was also seeking to explore the area of Insurance Linked Securities with local professionals who specialise in that sector.

He said HM Government of Gibraltar is working to make Gibraltar the European hub for the growing ILS business.

His visiting delegation included the insurance regulator, insurance specialists and service providers from Gibraltar as well as the Finance Centre Director and the senior executive, insurance from Gibraltar Finance.