Bermuda’s re/insurance companies are expanding overseas rather than leaving the Island according to two industry experts.Chris Klein, global head of reinsurance markets at Guy Carpenter, and Michael Butt, chairman of Axis Capital Holdings Ltd, told Reactions magazine that while some firms have redomiciled their holding companies most have maintained their operations here in Bermuda and that the growth into other markets is simply part of a “natural evolution”.The US tax threat, favourable tax treaties between the US and Europe in countries like Ireland and Switzerland, a close proximity to diversified markets in Europe, a safer and more attractive location for talented staff and Solvency II were all cited in the report as reasons for re/insurers being lured away from Bermuda.But Mr Klein questionned whether it was really a case of companies leaving Bermuda.“Some companies are relocating their holding company from Bermuda but it doesn’t necessarily mean the focus of that company’s operations is moving,” he said. “It is a case of a brass plate moving from one door to another and perhaps some board meetings being held in the new domicile.“Many of the companies that have redomiciled to Europe have left the bulk of their operations where they were - in Bermuda.”Mr Klein pointed out that more focus was being made on Europe and even those companies staying in Bermuda have been opening branches or underwriting companies in Switzerland, for example.“That is largely to do with gaining access to continental European business,” he said. “If you want to access provincial business in continental Europe then a local company staffed by local people is the best way to penetrate a European market.”Mr Butt, a veteran of 40 years in the industry, told the magazine there were two issues at play - expansion and leaving the Island, but they were both completely separate.“A lot of the expansion is being treated as if people are leaving,” he said. “It’s about companies growing and going to the next phase of what they need to do, get into markets to gain diversification to develop a balanced book of business over time.“It is exactly what happened in the 1990s. We put our capital and our key corporate functions into Bermuda then we expanded from there, initially into London. What we are seeing now is a natural evolution, not a reaction against Bermuda.”However, despite the increased competition for business, Mr Butt said that the European and Bermuda insurance markets enjoyed a symbiotic relationship, with both depending on each other.“We currently cover between 30 percent to 40 percent of the cat risks of the major European markets and as much as 30 percent of the other ‘capacity’ risks in the region,” he said. “We are extraordinarily important to the stability of the European insurance market,.“That’s the reason Bermuda and Switzerland represent the first wave of Solvency II equivalence. So we’re not begging on one knee. We will be transparent and I’m confident we will gain accreditation.”Mr Butt added: “Get things into perspective. For businessmen no place in the world is ever perfect. There are things in Bermuda that companies have to address. The cost base of Bermuda is high and some activities have to be done elsewhere, for example.“If there was a sudden need to recapitalise the reinsurance industry next month where would the capital go? In 2001 about 98 percent went to Bermuda. In 2005 about 90 percent went to Bermuda. In 2011, it would be 80 percent because Bermuda - if not perfect - is still the most attractive option.”Standard & Poor’s director Laline Carvalho told Reactions that she anticipates more management boards eventually taking the decision to leave Bermuda.“The number of companies relocating to other financial centres is not happening at a fast pace as a proportion of the whole,” she said, “But there is a lot of discussion within management teams (about it) right now.”However she added that many companies who were previously considering a move out of Bermuda had put their plans on ice for the time being.“There are still some uncertainties around European locations, what with the economic situation - for example, in Ireland,” she said. “Some companies considering a move out of Bermuda might be thinking that now is not the right time to make the move.”Among the other concerns weighing on re/insurers minds, said the report, were the Island’s worsening gun crime rate and the restrictions imposed on expatriates, including the difficulty in getting work permits, with a number of companies flying in staff to working during the week rather than paying their relocation expenses.