The number of insurance start-ups setting up shop in Bermuda declined last year compared to 2006.

Two years ago 82 insurers and reinsurers launched their businesses on the Island, but that figure dropped to 71 during 2007.

The main reason behind it was due to the slow down in captive formations as a result of a softening market, according to Jeremy Cox, the BMA's supervisor of insurance.

"We have seen a slowing of captive incorporations as a result of a softening market and an organisations' ability to purchase coverage at competitive rates in the traditional, ie the commercial, market," he said.

"This is compatible with general trends in the global insurance market. What we have seen over the past year is that the nature of the of the business that has come to Bermuda continues to be very high quality, consistent with our focus on maintaining high standards in the jurisdiction from both a regulatory and commercial perspective.

"In addition, Bermuda remains the leading captive domicile, still accounting for 30 percent of the global captive market."

Leading the way in terms of numbers were the Class 3 companies, with the bulk of the new incorporations opening up in the summer from June onwards.

Among some of the biggest players in that category, were CIFG Guaranty Ltd., the French domiciled triple-A-rated reinsurance firm set up when its parent company CIFG established new headquarters on the Island for itself and CIFG Holding.

CIFG Holding Ltd., as the company was renamed, is the holding company that owns the companies that make up the CIFG Group, which includes the New York-based primary financial guaranty subsidiary CIFG Assurance North America, Inc. and the Paris-based financial guarantor CIFG Europe.

Hot on its heels was Cyrus Reinsurance II Ltd., a sidecar of XL Re Ltd., while XL's rivals and neighbours Ace Bermuda Insurance, started up a subsidiary called Paget Reinsurance Ltd., which provides customers throughout the world with creative and flexible rent-a-captive facilities to support their risk management programmes.

A rent-a-captive is an insurance company which 'rents' its capital, legal status and capabilities to customers interested in sharing in the underwriting results of their business operations.

Other significant movers included Ironshore Reinsurance Ltd., a vehicle to reinsure its own business set up by billion-dollar Bermuda start-up Ironshore Insurance, which, itself, only opened its doors to business on the Island at the start of 2007.

Meanwhile, Sideris Re, a new platform that extends First Reserve Corporation's presence in the insurance segment of the energy value chain, joined the growing list of new incorporations, while Guaranty Direct Insurance Co. Ltd. and Norton Re II Insurance Ltd. also went into business, as did Morgan Stanley Reinsurance Ltd., a Class 3 long-term reinsurer.

Starr Insurance & Reinsurance Ltd. and Torus Insurance (Bermuda) Ltd. signed up as Class 4 companies in April and November respectively, with Argus International Life Bermuda Ltd. and Hannover Life Reassurance Bermuda Ltd. other notable names to enter the market.