Bermuda is not in jeopardy of losing its place as the leading captive domicile, according to the head of one of the Island's leading captive management companies.

Philip Barnes, managing director of Aon Insurance Managers (Bermuda) Ltd. ? Aon, as a global group, by the numbers, places first on a worldwide basis as a captive manager but ranks second to Marsh as the leading captive manager in Bermuda ? told an eye should be kept on the situation but there was no reason to panic when looking at the high incorporation rates of rival domiciles in recent years.

There has been some concern from Bermuda captive market participants at the quickening pace of incorporations in other jurisdictions, particularly in the Caymans and Vermont which both outstripped the Island last year when it came to new captive formations, according to the figures released in Business Insurance earlier this month.

But Mr. Barnes said: "Bermuda is still the leading domicile by a considerable degree ? in both premium volume and numbers. Other domiciles are coming along in leaps and bounds, but there is still a considerable distance between Bermuda and the others."

He said although numbers show that, in comparison, Bermuda may not have seen as much activity as a few of its rivals, the Island still led the pack with 1,150 captives operating from Bermuda in comparison to the Cayman Islands, which as the second largest captive jurisdiction has a total of 640 captives.

Estimates by Business Insurance ? based on data from Bermuda insurance regulator the Bermuda Monetary Authority, which makes public incorporation data for all classes of insurers, but without clear distinctions between captives and commercial insurers ? put the total number of captives in Bermuda as having fallen off by seven from the 1,157 captives on the books in 2002.

Bermuda has long been the leader as a captive domicile with the Island seen as the birthplace of the captive concept after the first self-insurance vehicles were set up here in the early 1960s.

Aon, through its acquisition of International Risk Management Group (IRMG) can trace its own roots back to Bermuda to 1963. Captive legend the late Fred Reiss ? credited with having developed the captive concept ? was the managing director of that company.

Although Mr. Barnes, who also sits on the Bermuda Insurance Management Association (BIMA), said there was no reason to be overly concerned about Bermuda losing its edge as the premier captive home, he did say that a more active marketing effort would not be amiss, as the Island is up against some "aggressive" campaigning by rival jurisdictions. He added that Bermuda also needed to fight the widely held perceptions that this is a pricier place to do business, as well as a tax dodger's haven especially given the heated political rhetoric being fired by US politicians in this election year.

In conclusion, Mr. Barnes said: "The message is that while the gap (between Bermuda and other captive domiciles) is closing, Bermuda still has a huge amount to offer. There is no need to panic, but Bermuda must sell itself properly."