Bermuda still retains and may well be gaining some competitive advantage over its many of its rivals and is now effectively the world’s number one capital centre for wholesale capital for risks within the insurance industry.That is according to Michael Butt, chairman of Axis Capital Holdings Ltd, who was part of a panel with former XL CEO Brian O’Hara, at the Bermuda Re/insurance 2011 conference organised by PricewaterhouseCoopers (PwC) and Standard & Poor’s (S&P) Ratings Services which was held at the Fairmont Hamilton yesterday.The pair talked about a number of issues including from the management of risk and growth in an unpredictable economic environment such as the challenges facing the re/insurance sector and balancing the interests of stakeholders in an increasingly regulated environment.“Bermuda is now effectively the world’s capital centre for wholesale capital for wholesale risks within our business,” said Mr Butt.“Both our insurance and reinsurance businesses are capital intensive and need global support and I believe that Bermuda is by far the best means for that.”Mr Butt said he believed that capital would flow back to the Island in the form of sidecars and other vehicles in the wake of the next big event.He said that the market had evolved with the ability of companies to move their management across the globe not just those in Bermuda but also in other parts of the world.Mr O’Hara said that at the outset of Bermuda’s insurance market CEOs were required to live on the Island but now more companies had redomiciled to Ireland and Switzerland and had more staff based in the US.“I wouldn’t react too much because senior executives may have moved to other places,” he said.“What is important is that we still have an underwriting culture and pool of expertise that is very strong in chosen lines and should continue to be so and to be a competitive force in the future and a spawning ground of new lines of business or and expansion of those.”Mr Butt had earlier given an overview of capital management in a softening market, saying that he thought companies would be equipping themselves with sufficient capital to take advantage of a turn in the market.On the issue of diversification, he said that while the industry as a whole had been following that route for some time, it had resulted overall in more losses than income in terms of the exposure to catastrophes in Asia over the past few months. Diversification could be attractive, particularly from a shareholders’ point of view, but it had to be available at the right price.On modelling, Mr Butt said that there was no doubt that the sector had improved significantly over the past ten years, however every time there was a major event the faults became apparent.From the perspective of a chairman, he said that most boards and management teams were spending more time dealing with the issues of enterprise risk management and subsequently Solvency II and as a result the industry was healthier for it.In favour of more geographically diverse boards in line with the global nature of the business, especially given that 70 percent of the world’s growth in the future is expected to come from new and emerging markets, Mr Butt said he preferred a division of power between the chairman and CEO and admitted that it was becoming increasingly hard to find relevant people with the knowledge who could add value to the board.Mr O’Hara said that the right skill sets and timing were key for those companies seeking diversification and where the make-up of the board was concerned in the case of a combined chairman and CEO role, a lead director was essential to maintaining the right balance of power.The conference had opened with oversights from Caroline Foulger, insurance leader with PwC Bermuda, David Law, global insurance leader at PwC, Peter Dunkerley, director of insurance and reinsurance at PwC Bermuda.The opening panel discussion on mergers and acquisitions featured moderator Laline Carvalho, director of S&P, and panellists Bill Babcock, CFO at PartnerRe Ltd, Marty Becker, CEO of Alterra Capital Holdings Ltd, and Robert Fleischer, managing director of Willis Capital Markets and Advisory.