Bermuda continues to have a bright future as a global insurance centre, despite political threats from the US and elsewhere, according to Flagstone Re co-founder Mark Byrne.

What matters to the Island is not whether insurers domicile their holding companies here, but that people continue to do business here, he said.

Mr. Byrne spoke with The Royal Gazette yesterday, a week after he stepped down as executive chairman of Flagstone, one of several reinsurers set up in Bermuda in the wake of Hurricane Katrina at the end of 2005.

He revealed that he plans to sail around the Pacific Ocean for a year with his family — but he is already focussing on his next business projects.

Flagstone co-founder and chief executive officer David Brown will continue in his role while Daniel James becomes non-executive chairman.

"I remain very optimistic for Bermuda's future," Mr. Byrne said. "It has a very sensible and sound regulator [the Bermuda Monetary Authority] and although there certainly are some political threats from the US and the G20, I think they're relatively remote."

Earlier this month, Flagstone completed the move of its holding company from Bermuda to Luxembourg. In 2008, the reinsurer moved the headquarters of its operating company to Switzerland, making the Bermuda unit a subsidiary of Flagstone Reassurance Suisse.

But operations in Bermuda have continued as normal through the changes, with 55 staff based at the Church Street office. And people, rather than holding companies, are the key for the Bermuda economy, Mr. Byrne said.

"What really matters is brokers getting off aeroplanes with submissions," he added. "This industry brings in 10,000 expats who make a lot of money and spend it on rent, airfares and in stores.

"As long as catastrophe reinsurance keeps being written here, the market can continue to grow. I'm even seeing some green shoots in other lines of reinsurance."

At the time the Luxembourg move was announced, Flagstone said it was seeking to establish its identity as a European company. Mr. Byrne declined to elaborate further on the reasoning behind the change of domicile.

Flagstone opened its doors for business in December 2005, with around $550 million in initial capital. As of March 31 this year, the company had total shareholders' equity of more than $1.2 billion and 14 offices in 13 countries.

Mr. Byrne said he was proud of what Flagstone has achieved in its four-and-a-half years. Over the past three years, Flagstone's loss ratio had been among the lowest among its industry peer group, he said, while the company had won awards for its client service. It technology ranked with the very best in the industry, he added.

"The global financial crisis gave us a kick in the teeth, like it did a lot of people," Mr. Byrne said. "Adjusted for the crisis, our return on equity would be about 20 percent — as it is, we have been in the high single digits.

"In terms of our positioning in the marketplace, we've done incredibly well."

He gave much of the credit for the low loss ratios achieved to the advanced technology and accompanying expertise that Flagstone has built up.

"We have 15 PhDs, the industry's largest supercomputer, 15 actuaries and 25 people who spend all their time modelling catastrophe risk," he said. "But modelling has to be coupled with quality underwriting and we have the right people for that too."

Mr. Byrne, who will receive cash severance payments totalling $2.2 million following his resignation as chairman, will continue to sit on the Flagstone board as a non-executive director. But his departure from the executive role will break up the leadership partnership with chief executive officer David Brown that has overseen the company's development.

"I don't expect that to have a material impact," Mr. Byrne said. The partnership worked with Mr. Brown "holding the fort and me running around the world making acquisitions and meeting with clients", Mr. Byrne said.

"I view the platform as largely complete and now it's a question of optimising it."

That platform encompasses offices in Canada, the UK, the US, Switzerland, Puerto Rico, South Africa, India, the United Arab Emirates, Brazil, Luxembourg and the Cayman Islands, as well as Bermuda.

Mr. Byrne chaired the Education Board for a six-month period before resigning because of what he saw as a lack of political will to make the necessary changes to the system.

"Education is a troubling problem for Bermuda and I know the new chairman of the Education Board, Darren Johnston, feels the same way," Mr. Byrne said. "The first step is to recognise the severity of the situation — it's a dysfunctional system that needs radical change."

While he was hopeful that the Board and the Ministry of Education would introduce improvements, he added that it would not be at the pace that he had wanted to see.

For now he has put his home in Bermuda on the market with the aim of downsizing to a smaller property, once the family returns from its Pacific voyage.

The four children, aged between four and 11, will be schooled on the sailboat, while Mr. Byrne will take a look at some business opportunities in Asia.

Mr. Byrne said he had several projects under way and added: "I'm sure Bermuda and the reinsurance industry has not seen the last of me."