The Isle of Man has thrown down the gauntlet to Bermuda as it bids to go head-to-head with its competitor in the reinsurance market.

In an article in yesterday's edition of Insurance Day publication, the Isle of Man Finance department's director John Spellman claimed the Irish Sea-located island's flexible tax regime, regulatory system and highly skilled workforce can compete with Bermuda's world leading reinsurance industry.

But showing restraint and diplomacy, some of Bermuda's top financial chiefs have made no comment in response to the Isle of Man claims, while Bermuda's Ministry of Finance glossed over issue, preferring to promote the Island's strengths rather than be drawn on the threat posed by the Isle of Man.

In the past the two offshore financial centres have been drawn into verbal sparring, most recently over a dispute about space satellite orbiting rights.

Mr. Spellman told the five-times-a-week UK trade publication Insurance Day that despite reinsurance currently being a relatively small part of the island's thriving financial services scene, the government was set to carry out a major review of the sector.

"We want to go head to head with them (Bermuda) to engage some of the biggest global names in reinsurance," he said.

Insurance Day went on to say that Bermuda's present government was viewed as less welcoming to the financial services industry than previous regimes and there was also concerns about the ease of getting work permits, according to market commentators.

Affordability of property, they said, was also an issue for firms looking to relocate, with the average price of a stand-alone Bermuda home soaring to $1.5 million in 2006, according to estate agents.

In the Isle of Man's favour, the publication claimed, was its sizeable life market with gross written premiums amounting to £9.5 billion and around 150 captives with a combined premium of £10 billion.

Not being part of the European Union, it was also exempt from Brussels directives, it said.

Bermuda's Finance Ministry responded by side-stepping the matter of direct competition and instead painting the picture of the Island being one of the largest reinsurance centres in the world and continuing to be viewed as a domicile of choice for large and sophisticated start-ups.

A Finance Ministry spokesman said: "Very recently a CEO of a billion-dollar 2005 start-up noted that 'Bermuda remains a good place to be located in the reinsurance market'. He went on to say that 'when waves of start-ups come there is always a queue for Bermuda.'

"In addition to insurance and reinsurance, Bermuda has caché for other kinds of international business. A few weeks ago, principals of North America's largest privately held company with annual revenues of $90 billion paid a visit to the Ministry of Finance to thank the Government of Bermuda for its willingness to facilitate 'fast paced sophisticated ways of doing business'.

"Bermuda serves as the hub of this diverse group of companies that are engaged in trading, investment and operations around the globe.

"We take that compliment as a ringing endorsement of the business policy framework that Government has nurtured and developed. We have demonstrated a comparative advantage and market efficiency that will be difficult to emulate, particularly in the specialised field of reinsurance."