Bermuda has seen 17 new insurance ventures set up on the Island since the first of the year ? with the bulk of business activity being in the captive sector.

Those numbers ? which were on par with figures from the first quarter of 2002, when Bermuda saw the same number of incorporations ? were revealed yesterday in data released by the Insurance Division of the Bermuda Monetary Authority. (see separate chart)

However, incorporation activity, during these two periods, pales in comparison to incorporations during 2002 which saw a bumper crop of new companies set up in response to improved business conditions after the September 11 terrorist attacks left a void in capacity.

Some 74 insurance companies ? many of them the largest class four ventures capitalised with $100 million or more per firm ? quickly responded to the change in business conditions by getting up and running before the end of the first quarter of 2002.

This was according to Supervisor of Insurance Jeremy Cox, telling The Royal Gazette at the time that the Island was seeing record activity.

Now those close to the industry are carefully watching for signs of the much-talked about insurance cycle taking a downward turn after two years of hiked rates and tight terms and conditions.

Experts predict that rates have topped out and that some insurance lines are now starting to come down.

But that may not necessarily have a negative impact on captives, with certain industries ? health care and professional liability, for example ? still finding the cost of traditional cover prohibitive.

Captive companies ? entities set up to insure their owners ? in Bermuda date back to the 1960s and were the original backbone of the Island's insurance sector.

Today captives remain an integral part of the Bermuda market with two-thirds of the island's insurance companies falling into this category.

Breaking down incorporations for the first quarter of this year, the greatest activity was seen in the class one and class two areas ? with ten of the 17 new companies falling into these areas, compared to 11 of 17 a year ago ? which are both for captive insurers. (see separate glossary).

There were no class four insurers ? the highly capitalised companies licensed to write either direct excess liability and/or P&C re/insurance ? incorporated during the quarter.

Nor were there any class four companies formed here during the same period a year ago.