This is the text of a City Comment column by Anthony Hilton that appeared in London?s Evening Standard on the threat the Bermuda reinsurance market poses to Lloyd?s of London.

IT IS often the case that the speeches politicians make abroad are far more visionary and bold than anything they dare say at home. To some extent it is also true in business.

While no one could ever accuse Lloyd?s of London chairman Lord Levene of failing to confront the issues the market faces at home or abroad, a recent speech he gave in New York last week provided an admirable summary of what Lloyd?s has done in recent times and what it still needs to do.

What he did not mention was Bermuda. This is a pity because the growth of insurance on the island is the story of the year.

The hurricanes of last autumn were the most costly natural disasters the world has ever seen and, coming as they did just 12 months after a hurricane season that was almost as expensive, they made a huge dent in the capital base of the world?s insurance industry.

Replacing that capital in order to take advantage of the stillfirm insurance market has been the priority of management around the world in the past few months.

But when the scores come to be totted up, it is clear that Bermuda has had far more and far easier success than Lloyd?s in replenishing its coffers and launching new businesses, unfettered by the legacies of past losses.

This should set alarm bells ringing at Lloyd?s. Lord Levene stressed in his speech the demand by UK regulators for contract certainty ? meaning that the policy wording of an insurance contract should be firm from day one of the cover, not come limping through several months later.

Most would agree that such basic business discipline is long overdue ? though more complex to deliver than it appears from the outside. But what everyone is too tactful to confront is that this and most of the other regulation that now cocoons the UK market barely exists in Bermuda. The result is that anyone wanting to set up an insurance company and raise the capital can do so there more quickly and easily. So the market is voting with its feet and London is the loser.

Fans of regulation say business gravitates to well-regulated markets. Not in this case.

Bermuda is not the Wild West, but it is a lot less restricted than London.

Indeed, the main constraint on what companies can do there comes not from the authorities but from the debt rating agencies ? commercial organisations themselves. It is they, not the regulators, who have demanded certain levels of capital backing for start-ups as a condition for granting an A minus rating . The system is not flawless, however.

Their toughness does sometimes appear to have been diluted by sudden attacks of pragmatism.

But the other issue in Bermuda is tax ? or lack of it.

It is odd, given Chancellor Gordon Brown?s propensity to tax most things that move, that he has not used his muscle to level the playing field. If a company is Bermuda-based and its board goes offshore for meetings, it escapes the UK tax that falls so heavily on its British-registered counterparts.

So as things stand, two identical insurance companies, each with the same number of staff in London and carrying out the same range of activities here ? one registered in the UK and the other with a brass plate in Bermuda ? operate under different tax regimes. This gives the Bermuda business a huge, and arguably unfair, advantage in competing with a London-registered company, and gives the whole island an advantage in attracting and fostering new companies.

Some might argue that offshore locations always pose a threat in good times but fall away when the cycle turns and the world becomes much tougher. That has certainly been true in the past. But there is something about the scale of the Bermuda challenge this time that ought to be noted by anyone with a concern for the long-term health and prosperity of the London insurance market.