As many as 74 insurance companies have set up on the Island in the wake of the September 11 tragedy and the void in insurance capacity that followed.

Supervisor of Insurance Jeremy Cox told The Royal Gazette that during the last two quarters Bermuda had seen “significant companies establishing significant presence here”.

Mr. Cox continued: “Since September 11 there were 74 companies that formed; a large number of which formed in the last quarter of 2001. These however include all classes of insurance companies and captives.”

As such the companies which have formed would range from single parent captive insurers (class one) and multi-owner captives (class two) to class three insurers or reinsurers with a minimum capital and surplus of $1 million. And the largest insurance and reinsurance companies falling in to the class four category with upwards of $100 million in capital and surplus.

Of those 74 companies the most high-profile start-ups have been the highly capitalised ventures including: Arch, Allied World, Axis Specialty, DaVinci Re, Endurance, Goshawk Re, Montpelier, Olympus and Queens Island.

The breakdown of new incorporations through the end of March, according to Insurance Division's records, showed that there were 26 class one and two companies formed, and the greatest volume of formations in the class three sector with 29 new companies.

In addition the class four - with capitalisation of more than $100 million per company - and long-term incorporations stood at 12.

In tandem with the surge in new insurance companies has come a significant flow of capital with more than half of the $30 billion of new capital earmarked for the global insurance and reinsurance industry since September 11 headed to Bermuda, according to a breakdown issued by investment firm Morgan Stanley.

Mr. Cox indicated that beyond the steady number of incorporations since September 11, last year was overall a bumper year for insurance incorporations with 108 ventures coming to our shores.

Mr. Cox said: “We have had three straight years of incorporations greater than 85 or 90 per year. And this year, from what I have been told by (Assistant Director of Insurance) Shelby Weldon, through February we have had better incorporation activity than last year at this time.

“Last year we had a total of 108 companies form for the total year, which is the highest number of incorporations, by far, in I don't know how long,” he said.

But the increase in incorporations is something that Mr. Cox sees as evidence of the Island's careful planning in years past.

Referring to “sweeping changes” made to the Island's insurance legislation in 1995, Mr. Cox said: “What has happened following September 11 has magnified the Island's prominence as an insurance sector but the reason that so many companies have formed here is because the prominence was already there.”

Mr. Cox added that Bermuda also established an important partnership with the industry some 20 years ago in setting up the Insurance Advisory Committee (IAC).

Mr. Cox said: “The Bermuda Government formed a committee, the IAC, way back - in the early 80s, which is a committee formed to provide advice to the Finance Minister on insurance related matters.

“And what is great about the IAC is that a number of key insurance professionals - in various areas of expertise - are a part of that committee, whether it be the main committee, or various sub-committees,” Mr. Cox said.

Mr. Cox added: “The Minister appoints these members every year, and chooses people who have the right level of expertise.

“Around that table you have people that also have a commitment to see Bermuda be successful, to ensure that Bermuda continues to remain credible. We don't however just sit back and say: ‘ok guys you do your thing.' We listen to what they have to say and we get their input, but we are the regulators. We still have to do our job, we still have to be the ones to make key decisions to approve or accept something.” Mr. Cox continued: “The partnership that we have with the industry is a partnership for progress, but it is not necessarily a partnership for regulation. The partnership has helped to

progress the legislation, it has helped to progress the regulatory environment. But we are the regulators. “There may be the misconception that the tail wags the dog but that is certainly not the case here in Bermuda,” he concluded.