Bermuda cannot compete with London in terms of talent, according to Catlin Ltd. chairman Stephen Catlin.

Mr. Catlin, speaking at the Financial Services Authority annual insurance sector conference this week, was quoted by Business Insurance as saying that London also “owns the business language of the world, has a legal system and a regulator which are both liked and trusted which is a good environment in which to write insurance and reinsurance”, he said.

Catlin redomiciled in Bermuda in 1999 “then the regulatory environment (in London) was an issue in a way it is not now,” he said.

He added that London would be more attractive to companies, and generate greater sums of revenue, if there was a reduction in the rate of corporation tax.

Chancellor of the Exchequer Gordon Brown yesterday cut the rate of corporate tax in the UK two percentage points to 28 percent.

Dan Glaser, managing director AIG Europe (UK) Ltd., said Bermuda did not pose a threat to London, Business Insurance added.

“No firm has vacated London to stop writing business there,” he said. “Competition is a good thing for different marketplaces and in the long term, London will benefit from Bermuda.”

Mr. Glaser also said that Bermuda was a place of specialisation — especially in terms of catastrophe risk. London has the advantages of being better located for access to the global industry and being the home of “a huge pool of talent” across industries, he added.

A wave of Lloyd’s insurers have either moved their domiciles to Bermuda or have set up subsidiaries on the Island.

While Bermuda has become the leading centre of underwriting catastrophe risk since 2001, the UK insurers have also cited tax and regulation reasons for moving.

All, however, have maintained their underwriting positions at Lloyd’s and in the London market.

This week investment vehicle Aquiline announced it was forming a Lloyd’s syndicate, 18 months after forming Validus Re in Bermuda.

Principles should drive global insurance companies, not simply regulations.

That difference in approach to the way the industry operates has been described as the way forward by Joe Plumeri, chairman and CEO of Bermuda-incorporated global insurance company Willis.

He was speaking in London at the UK Financial Services Authority’s annual Insurance Sector Conference and told delegates about the importance of embracing a principles-based rather than a rules-based approach not just to regulation but to running the entire industry.

“Principles are values you hold that are non-negotiable. You should know what the right thing to do is and do it with a passion,” said Mr. Plumeri.

“Otherwise we spend more time mechanically following the rules by making sure the boxes are checked and the forms filled out and not really acting in the best interest of our clients.

“The outcome of a principles-based approach, practised globally and with regulatory flexibility, will be that clients have confidence and faith in the industry — and that is a must for everyone involved,” Mr. Plumeri said.

Plumeri spoke of principles driving Willis’ decision to abolish profit and volume based contingent commissions, be transparent with clients and attain contract certainty — for which he praised John Tiner and the FSA’s leadership.

The conference also heard that principles are the foundation of Client Advocacy, Willis’ global service model that ensures that the client is at the centre of everything the company does.

Mr. Plumeri called for a consistent approach to regulation around the world affording clients the same level of industry service no matter where they are conducting business.