Brokers have formed a new association, the Bermuda Insurance and Reinsurance Brokers Association (BIRBA), to have one voice within Bermuda?s re/insurance industry and with regulators at the Bermuda Monetary Authority. Chairman David McManus, who may be better known as CEO of one of the Island?s broking companies, Arthur J. Gallagher & Co., said BIRBA was founded with the long-term sustainability of the Island?s re/insurance sector at heart.

Brokers, who act as the intermediaries between buyers and sellers of insurance and reinsurance, have long been a feature of the Island?s international business sector ? but for the most part, they have quietly gone about their business and kept out of the limelight. But recognising the pivotal role they play ? with every single dollar that comes into Bermuda?s re/insurance sector passing through them ? prompted them to band together.

Although BIRBA only formally voted in an executive board and put in place their charter in recent weeks, the association has already signed up 26 of the Island?s 30 licensed brokers as members. And they are kicking off their effort with a launch party for invited guests on Wednesday.

Mr. McManus told the first brokers association was established some 20 years ago, but over the years, it fell dormant as those involved moved into other areas of re/insurance or moved away from Bermuda.

Mr. McManus said the genesis of BIRBA forming was a conversation at a drinks party, where the heads of three of the Island?s leading brokers struck up a conversation on how little interest centred on broking, even though re/insurance was making the headlines in business pages around the world.

The Island?s re/insurance sector has been much talked about since hard market conditions kicked in in 2001, with those conditions compounded by the void in capacity that followed the September 11 terrorist attacks that year. Investors saw the hard market conditions, where there was high demand and short supply for coverage, as opportunity knocking.

Forces were mobilised and dollars invested to set up new re/insurance ventures. The bulk of those came to Bermuda ? with a wave of companies incorporating and getting down to business in quick time, at the end of 2001 and throughout 2002.

At least two of those new companies ? Axis Specialty and Endurance ? were respectively backed by capital investments from brokers Marsh and Aon.

Despite this, Mr. McManus said brokers have been kept in the shadows while carriers got the limelight. That realisation prompted Paul Markey of Aon, to strike up the subject with Michael Fisher of Marsh and Mr. McManus, of Arthur J. Gallagher, at the drinks party earlier this year.

Mr. McManus recalled that Mr. Markey said ?have you noticed how brokers seem to have dropped out of view. You have everybody talking about insurance, including the media, but brokers are not mentioned??. The three broking bosses concluded that they had no one to blame but themselves for the situation.

Mr. McManus said with business rolling in, the sector was simply too busy to think about anything than their primary goal; placing business.

But wanting to turn the situation around, led the three to brainstorm their way to the forming of the new association.

?We felt it was important as brokers to get together and re-establish the profile of the importance of brokers in the Bermuda insurance and reinsurance sector,? he said, adding: ?It is important to emphasise that every dollar that comes into the property and catastrophe industry in Bermuda comes through insurance brokers.?

The CEOs of the Bermuda subsidiaries of the top five broking companies ? Marsh, Aon, Willis, Arthur Gallagher and JLT ? got together and created a forum, with the intent of ?encouraging dialogue within the market on matters of mutual interest?.

Mr. McManus added: ?We had a series of dinners with presidents of the new reinsurance companies ? Axis, AWAC, Endurance, Arch and Montpelier ? with the intent of talking about the issues and how we can build a viable sustainable broker market.? He called the talks ?collaborative?, and not at all, a case of ?us versus them?. Although the upturn in business is welcome it is also a bit of a double-edged sword. ?The grave danger to us, as brokers, is the great growth we are seeing. We have to make sure that is sustainable.?

Mr. McManus said Bermuda brokers who have staffed up and grown their operations, as business has increased, depended on carriers to keep lines of business here: ?If underwriting goes to the US, then brokers are hit, for example, by having to make staff redundant.?

He said many of the firms were moving to larger premises ? including Arthur J. Gallagher, who recently launched a trainee programme for young Bermudians ? and staffing up to meet the needs of the market. He added that the association intended to network with the re/insurance carriers on how it was crucial that they wrote lines of business in Bermuda that were feasible, in this environment, and could be long-term.

?The new association is very much a product of wanting to build a voice with companies, and to avoid short-term, opportunistic lines of business.?

Deputy chairman of the new association is Michael Fisher, while Paul Markey is secretary and treasurer. Nigel Clark is also a member of the executive. Leading up the insurance and reinsurance BIRBA sub-committees are Roy Fellowes and Tony Fox, which is where Mr. McManus said the real committee work will be done. ?The sub-committees are where they will deal with the nitty, gritty market issues that lead to Bermuda being a good place to do business.

So far, Mr. McManus said the association had been well-received in the international business community with the Chamber of Commerce?s Association of Bermuda International Companies (ABIC) chairman David Ezekiel saying he welcomed a broking association on board. On the carriers side, Mr. McManus said there had also been positive feedback, including from XL Capital which had formally said they welcomed the fact that there was now a broking association to work with. Arch and Everest had also reportedly committed to placing certain business through Bermuda?s brokers.

In addition to driving good business practice, the association also intends to be an information resource and advocacy body. On the advocacy side, Mr. McManus said, where appropriate, the associate would look at regulation issues and liase with Government and the Bermuda Monetary Authority?s insurance division on the protection and maintenance of a regulation environment conducive to a strong Bermuda market. Mr. McManus said Bermuda?s broking industry was regulated, as the rest of the re/insurance sector is, by the insurance division of the Bermuda Monetary Authority. He said however that there was some question as to whether there was adequate enforcement of certain policies ? including regulations governing what is reportedly a common practice, overseas brokers coming into Bermuda to place business with Island carriers.

?The membership have not said they want more regulation but better enforcement of existing regulation,? he said.

Mr. McManus said the association would ultimately raise the question of what was an appropriate level of regulation and whether or not the bar was high enough.