Bermuda faces strong competition for lucrative insurance-linked securities business, the Island’s stock exchange chief warned yesterday.

Greg Wojciechowski, president and CEO of the Bermuda Stock Exchange (BSX) said that established rivals like the Caymans, Guernsey and the Republic of Ireland had been joined by newcomers Malta, Gibraltar and Puerto Rico in a bid to muscle in on Bermuda’s supremacy in the sector.

Mr Wojciechowski said Bermuda was home to more than half of the insurance-linked securities (ILS) class worth a total of nearly $16 billion at the end of last year.

He added: “The jurisdiction has positioned itself at the forefront of the global development of the ILS asset class and the outstanding amount of ILS issued in Bermuda represents 57 per cent of the worldwide stock of ILS.”

Mr Wojciechowski said that the Bermuda Monetary Authority (BMA) had amended legislation and brought in new standards to make it easier for the financial services sector to capitalise on special purpose vehicles like ILS.

He added that, in addition, the private sector had established expertise to support ILS, like accountants, lawyers, fund structures and investors, while the BSX and the BMA were respected as regulators.

Mr Wojciechowski said: “This cottage industry has been cultivated from Bermuda’s experience in the reinsurance industry that has evolved to support the ILS sector.

“This existing foundation makes Bermuda the intuitive place to list ILS structures.”

The highest ever number of property catastrophe bonds — more than $8 billion — were issued worldwide last year, according to Aon Benfield Securities.

And, by the end of last year, there were more than 760 securities listed on the BSX.

Aon Benfield Securities CEO Paul Schultz said: “The listing of catastrophe bonds on the BSX has become an efficient, well-regulated process and the exchange has proved itself in being able to house the expertise necessary to satisfy the demands both of our clients and ILS investors.”

And Brad Adderley, a partner in legal firm Appleby, added: “The regulatory framework and the operational infrastructure in Bermuda offers institutional investors a level of comfort that no other jurisdiction can provide.

“The Island’s deep experience and longevity in supporting the ILS sector has contributed to Bermuda becoming a centre of excellence and the jurisdiction of choice for the ILS market.”