The heightened social, policy and regulatory risk of the past four years that has caused several Bermuda-based companies to redomicile will be greatly reduced over the next two years.

That is the view of Brad Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers (ABIR), who was speaking on a panel about 'The Changing Landscape of Bermuda' at Bermuda (Re)insurance 2010 held at the Fairmont Hamilton Princess by Standard & Poor's and PricewaterhouseCoopers (PwC) yesterday.

Mr. Kading, who was joined by moderator Colm Homan, partner, assurance and business advisory services - insurance at PwC, Andre Perez, CEO of Horseshoe Insurance Advisory, and Mark Wilcox, senior vice-president, chief accounting officer and corporate controller at RenaissanceRe Holdings Ltd., responded to a question from the floor about the recent spate of businesses moving their holding companies or legal entities.

He said there were three risk factors: US policy risk; social, policy and regulatory risk in Bermuda; and the regulatory risk from Europe, which had increased over the past four years.

But all of them were set to lessen in 2011 and 2012, considering that Bermuda was still a good place to do business and the Bermuda Monetary Authority's work on achieving Solvency II equivalence, as well as lobbying of the US government on tax legislation issues.

"In Bermuda over the last three or four years all of those risk factors elevated over that time and that is why we have seen some of our companies here move their holding companies or legal entities, but in 2011 and 2012 all three of those risk buckets will be down," he said.

Among the other points of discussion were Solvency II and mergers and acquisitions (M&A) activity and their impact on the re/insurance industry at the conference which is now in its fifth year and attracted 260 attendees.

Mr. Wilcox kicked-off proceedings by talking about the sheer volume of upcoming regulatory change, including Solvency II equivalency and reinsurance accounting standards, but he said that the key was in working out what had been missed and addressing those issues.

Mr. Perez said his main concern was the need for more resources, many of which would be taken away from focusing on the business.

"Regulation is great," he said. "But when I think of the amount of time and resources that are devoted to this regulation whether for good or bad it is really taking them away from the business."

He commended Bermuda for being selected by the European Commission as one of the first wave of countries to be assessed for equivalence with the new Solvency II regulations for insurance companies, especially considering those countries which had failed to make the boat, but he added that on the flipside nobody wanted to be the first test case and the island faced a number of challenges including coming up with a framework for all of the different types of insurance and companies that meets the requirements, however it was already ahead of its competitors with big and sophisticated market.

On the subject of M&A activity, Mr. Perez said that in theory there should be a number of opportunities available in future.