Bermuda is proving a hit with the Latin American nation of Colombia.

For a boom in the insurance industry across the Latin American (Latam) region has led to a flood of Colombian captive insurance firms registered in Bermuda.

Maria Escobar, head of Marsh captive solutions for Latin America told Captive Review: “For Latam captives, Bermuda continues to be the dominant domicile because of its tradition, experience and regulation.”

She added that Bermuda — along with other countries — had made “an important effort” to sign tax information exchange agreements with relevant countries, including Colombia and other rapidly-emerging economies like Argentina, Brazil and Mexico.

Ms Escobar said: “Latin America is facing an interesting change in terms of risk management.

“As an emerging market with sustainable growth over the past years, it has become more integrated and more sophisticated regarding risk financing options and now has the perspective to understand and take advantage of the positive side of risk.”

In the same issue of Captive Review, PwC Bermuda managing director and captive insurance leader David Gibbons and PwC tax partner Carlos Chaparro, based in Bogota, Colombia, said that the country continued to be attractive for insurance and captive insurance companies.

They said the Colombian economy had grown by more than four per cent a year for the last three years and had had almost a decade of strong economic performance, while the growth of cross-border “multi-Latinas” across the region had also fuelled growth.

The pair added: “This has resulted in an increase in demand for insurance that exceeds Latin America’s overall economic growth and has resulted in robust premium growth across all Latin American countries, with Colombia’s premium growth at 8 per cent in 2013.

“Specific insurance products and market segments with high growth potential in Colombia and Latin America include personal lines and life insurance.”

They added: “Insurance regulation in Latin America is evolving towards a more sophisticated risk-based capital approach to solvency assessment. This is line with European and US regulatory trends and more open markets in the Pacific Alliance countries of Chile, Mexico, Peru and Colombia.”