BMA sees 30% rise in registrations
The Bermuda Monetary Authority (BMA) has announced that almost 30 percent more insurance companies were registered on the Island this year to date than in 2010.
Thirty-one insurers have been set up in Bermuda up until July 31, compared to a total of 36 newly-registered insurers for the whole of 2010.
Jeremy Cox, the Authority’s CEO, said the increased pace of registrations for this year, with upward trends in specific classes of insurer, was very encouraging.
“The area where we are seeing the largest single increase is in the Special Purpose Insurers (SPI) class,” he said. “We have already seen 12 new SPIs registered this year. This compares to eight SPI registrations for the whole of 2010.”
Mr Cox said that having put a framework in place to accommodate SPIs in 2009, the BMA was pleased to see market interest in these vehicles translating into more registrations.
“For example, it was exciting to see earlier this month the board of the California Earthquake Authority (CEA), that state’s quasi-governmental residential earthquake insurer, approve a $150 million catastrophe bond issue via a Bermuda SPI, Embarcadero Re,” he said.
He continued: “The choice of a Bermudian reinsurer for this latest CEA cat bond issue was a departure from previous normal practice for them, and a positive indication that markets seeking quality supervision remain confident in Bermuda. Our work continues on ensuring the framework enhancements we are putting in place build upon the effectiveness of Bermuda’s regulations and also remain consistent with international standards.
“The most recent positive endorsement of the BMA’s commitment to effective, quality risk-based supervision is the third-country equivalence assessment report released by the European Insurance and Occupational Pensions Authority (EIOPA) on August 17 2011. In this report, EIOPA indicates that Bermuda’s regime for commercial insurers meets the criteria for Solvency II equivalence, with certain caveats. This is a great step in the right direction for Bermuda.”
Shelby Weldon, the BMA’s director of insurance, licensing and authorisation, said that most of the new SPIs were being formed as a result of the record-setting level of global catastrophes that occurred during the first half of 2011.
Mr Weldon said that insurance registrations to date also reflected new business in both the captive and commercial insurance sectors of the Bermuda market.
“Compared to 2010, Bermuda has also seen a rise in the level of Class 3 and Class 3A insurers being registered here,” he said. “Five of each have already been registered up to July 2011. This compares to the four Class 3s and two Class 3As that were newly registered in total last year.”