Bermuda insurance figures for 2002 paint a rosy picture of strong growth for the sector on the back of the Island?s insurers posting significant levels of premium growth.

Expectations were also said to be high for continued growth for 2003 and this year.

The Bermuda Insurance Institute ? in a Press statement released in tandem with the release of the figures compiled by the insurance division of the Bermuda Monetary Authority ? said the numbers showed that world markets were increasingly looking to the this market for much needed capacity.

Because of filing regulations and the time the BMA needs to compile the results, the latest figures available were for 2002.

Those figures ? which cover a year that saw unprecedented business for re/insurers after a void in capacity following the September 11 terrorist attacks ? show that net written premiums written by the sector grew by 25 percent while gross written premium jumped 27 percent.

In addition, Bermuda-based companies, in aggregate, saw assets increase by 18 percent and capital and surplus rose by nearly 15 percent.

The strong gains in written premium were said to have been led by highly capitalised insurers and reinsurers ? both new and old ? in 2002 as commercial insurance buyers sought capacity to replace that what had gone out of the US marketplace.

There was also a demand for Alternative Risk Transfer (ART) options from risk managers seeking alternative capacity after some traditional sources ceased writing business in healthcare, professional liability and other lines.

Breaking down the growth by class of insurance company, gross premiums written in the Bermuda market rose 70 percent for the largest insurers (the class 4 companies) while there was also significant growth in captive insurers with some risk managers turning to the self-insurance concept to meet risk management needs.

During the 2002 year, 35 Class one and 17 Class two companies ? which are predominately captive insurers ? were formed.

There were 34 Class 3 companies formed, which require capital and surplus of $1 million and three Class 4 companies registered, which require capital and surplus of $100 million. In total 96 international insurance companies were formed in 2002.

Marketing chairman for the Insurance Advisory Committee and past president of BII Roger Gillett said captives had seen $1 billion in premium growth, or a ten percent increase, over the previous year.

Looking at growth in the other classes, Mr. Gillett said gross premium levels of business had shot up to $62.7 million from $50 million in the previous year ? a 25 percent surge. Mr. Gillett underscored the growth the local market had seen further by comparing the total amount of business written in 2002 ? at $62.7 billion ? to $26.6 billion in 1998.

He added that class four insurers alone had seen a near three-fold increase in business in two years with premium growth going from $6.5 billion in 2000 to $17.4 billion in 2002.

Mr. Gillett said the incredible results from commercial re/insurers (categorised by the BMA?s figures as class three and four insurers, although class three classification can also be given to a captive that writes some third-party business) should not reflect badly on the lesser growth by the captive sector, as this group had seen unprecedented business.

Mr. Gillett said: ?Everyone will have seen growth. I would say that the other captive domiciles (with Bermuda being the leading captive jurisdiction) would have been on a par. And for class three and four re/insurers, in the major markets (US, UK and Europe), there also would have been growth but not to the level of growth we have seen here,? he said. Mr. Gillett predicted good business for this year as well. ?We are quite likely to see good growth in 2004, with business written equal to 2003, although the rate of growth may slow.?

All in all, Bermuda maintained its global leadership as a captive domicile ? the captive concept was pioneered here in the early 1960?s ? and also saw a healthy level of new captives being formed as well as growth in the use of existing captives.

Looking at the sector as a whole, the BII reported that Bermuda market?s strong performance in the 2002 underwriting year continued a multi-year trend as the fastest growing market for risk transfer.