Bermuda now has around 20 percent of the global catastrophe bond market and is well placed to claim a larger share amid rising demand.That was the message from panellists at the Bermuda Captive Conference yesterday, who told a packed room at the Fairmont Southampton how the new ‘Special Purpose Insurer’ (SPI) clasiification introduced in 2010 had opened the door to billions of dollars worth of new business in insurance-linked securities (ILS).ILS include cat bonds, industry loss warranties and sidecars, most of which are set up through SPI vehicles enabling reinsurers to tap the capital markets to increase their capacity for writing business.Leslie Robinson, assistant director, insurance licensing and authorisation, at financial regulator the Bermuda Monetary Authority (BMA) said there had been five new catastrophe bonds licensed in Bermuda through April this year and another five were formed in May as reinsurers geared up for the hurricane season.This came on the back of 23 SPIs formed in 2011, making it the fastest growing type of insurance entity on the Island.The BMA expects more ILS business to come down the pipeline, helped by its near halving of fees to set up an SPI, to $6,000 from $11,600.Appleby partner Brad Adderley, who has worked on ILS deals on the Island said other jurisdictions, particularly the Cayman Islands, had enjoyed a head start over Bermuda in the ILS business, but the SPI legislation had helped the Island catch up fast.Bermuda had become a better option than Ireland, the leading jurisdiction in Europe for catastrophe bonds, Mr Adderley argued. The process of putting cat bond capital to work had become slower in Ireland, where it was now taking “months” to close a deal, he said.“In Bermuda, the process is smooth and quick,” he said. “Speed to market is very important.“In the case of Cayman, it has been doing a smooth job with these types of transactions for ten or 12 years now. US lawyers have become very familiar with the process. So it’s hard to get that business to move, unless something goes wrong. It’s the path of least resistance.”However, Bermuda had the edge over Cayman in that it had a huge reinsurance market with all the related expertise, bolstered by a strong regulatory framework and service provider infrastructure, Mr Adderley said.“It makes sense for the cat bonds to be here,” Mr Adderley said. “A lot of these bonds are bought by Bermidian investors. If you are coming up to Bermuda to have a roadshow, then why not create the cat bond here as well?”Sean McCarty, of Aon Benfield Investment Banking, said domicile choice between Cayman and Bermuda simply boiled down to sponsor and investor comfort.He added that investors in ILS were chiefly pension funds. Initially, the investors had come out of the Netherlands and Canada, and later Australia, Japan and New Zealand. More recently US pension funds were investing in ILS.