For an Island so small, it is remarkable that Bermuda produces anything that could be labelled “best in the world”. Yet, occasionally, we can genuinely lay claim to something that we, or one of our small number, does better than the other seven billion people occupying the planet.

The shining example from the last few days was Flora Duffy’s stupendous triathlon performance, in the face of much adversity, to retain her Xterra World Championship title in Maui.

Those who saw her dominating the Ironkids events at Clearwater Beach more than 15 years ago could not have imagined that she would one day go on to conquer the world.

That she has done so is an example for all Bermudians that if you have what it takes to excel, hailing from this tiny and geographically isolated island should not stop you.

A less obvious example of Bermuda leading the world will be marked next week by a conference expected to attract some 400 people.

ILS Bermuda’s Convergence 2015 will bring in not only insurance experts, but also fund managers from around the world, who will network and lay the foundations for business deals.

Bermuda has emerged as the global centre for insurance-linked securities (ILS), a once obscure asset class that has enjoyed burgeoning growth in recent years, most of it through Bermuda.

More than two thirds of the world’s total $25 billion of ILS capacity was issued from Bermuda, according to Bermuda Monetary Authority (BMA) figures.

ILS allows investors to get a decent rate of return on their money — something that has become increasingly difficult for the likes of pension funds in these times of rock-bottom interest rates for savers.

In return, the investors put their principal at risk of being wiped out if a specifically defined insurance-loss event takes place, for example, a Florida windstorm that causes industry-wide losses of more than $50 billion. Because of the rarity of such events, investors have found ILS such as catastrophe bonds quite profitable and cases of capital loss have been rare.

Many investors are also attracted by the lack of correlation with the world financial markets. That is to say a hurricane or earthquake is no more or less likely to occur when the stock market crashes.

Pension fund managers that may five years ago have regarded ILS as something far too mysterious and complex to invest in are now increasingly regarding it as an accepted alternative asset class.

Even a tiny allocation from the astronomically large amounts managed by pension funds amounts to a lot.

Last year, the Organisation for Economic Co-operation and Development found that the assets managed by the pension funds in OECD countries topped $25 trillion. So total global ILS stock today amounts to mere 0.1 per cent of that.

Many outside Bermuda are recognising a huge potential for future growth. Just this week, this newspaper reported that the Horizon Kinetics hedge fund had increased its stake in the Bermuda Stock Exchange, on which many ILS vehicles are listed, to nearly 43 per cent. Murray Stahl, the fund’s co-founder, explained to investors: “One day — we do not know, but we hope — the ILS business is going to be orders of magnitude larger. We don’t know that, we can’t predict it, but insurance companies like to lay off their risk and Bermuda is the home of that kind of investment.”

That all sounds like good news to Bermuda, even if ILS business does not generate the sort of jobs numbers that the Island became accustomed to in the years of waves of new companies setting up after major disasters.

ILS has given birth to some new businesses here, including special units within existing reinsurance companies, as well as fund managers such as industry veteran Don Kramer’s ILS Capital Management, and consultants/dealmakers such as the Horseshoe Group.

Just as important is that it provides a source of capital to feed the Island’s existing reinsurance industry and provides work for brokers, advisory firms and lawyers here, supporting many jobs.

Britain has recognised the ILS explosion in Bermuda as “a missed opportunity” for London, which in itself is recognition of what has been achieved here.

The bottom line is that ILS represents a natural evolution of the reinsurance industry and if it were not happening here it would be happening somewhere else. Originally, the centre for catastrophe bonds was the Cayman Islands, but since Bermuda’s serious entry into this market in 2010, we’ve left them — and everyone else — trailing.

Credit is due to those from the Bermuda Stock Exchange, the BMA, the Bermuda Government and the insurance industry who recognised the opportunity and worked together to create the framework and spread the message to investors.

Perhaps Bermuda can find other niche areas in which we can lead the world, besides triathlon and securitised insurance products.

Both Flora Duffy and the ILS sector have shown it’s possible.