An EU seal of approval for Bermuda’s insurance market will make the global business more competitive, the head of the Association of Bermuda Insurers and Reinsurers said yesterday.

And Brad Kading, president and executive director of Abir, added that Solvency II equivalence in the EU would mean better access to insurance and reinsurance around the world.

Mr Kading said: “Cross-border trade of reinsurance is essential for the smooth functioning of insurance markets at a time when more and more reinsurance is needed to close the protection gap on uninsured catastrophe losses in both the developed and developing world.” He added: “The coverage provided by Bermuda’s commercial insurers and reinsurers makes insurance markets more competitive because more capacity can be offered to clients and consumers have greater choice of companies.”

Mr Kading was speaking after the EU, the world’s biggest market for insurance products, granted Bermuda’s regulation regime full equivalency with EU nations, which will allow the island to compete on an equal footing with European nations.

Bermuda and Switzerland, closely tied to the EU, although not a member, are the only two countries to be given the accolade.

Mr Kading said: “This will benefit Abir members in Bermuda — the red tape has been effectively removed.

“for example, the Bermuda Monetary Authority is now recognised as a global group supervisor for targeted insurance groups and reinsurance can be conducted on a cross-border basis without market barriers.

“For Bermuda insurers, this means an efficient rather than redundant layer of group supervision and for reinsurers it means cross-border trade without individual jurisdictional restrictions.”

Bermuda reinsurers supply about 40 per cent of US and British property catastrophe insurance and about 20 per cent of EU property-related insurance.

Mr Kading said: “Abir’s members and other Bermuda insurers have paid more than $35 billion in catastrophe claim payments to their US clients in the last 15 years.

“In Asia and Oceana, we’ve reported 20 per cent of the loss estimates for the 2015’s Chinese Tianjin fire and explosion, 29 per cent of the privately reinsured share of the 2011 Japanese earthquake and tsunami and 51 per cent of the reported liabilities for the New Zealand’s 2010 and 2011 earthquakes.”

He added: “As Asia’s insurance market develops, more and more global insurance capacity will be needed and Bermuda’s reinsurers are well-placed to help meet that need.”

Mr Kading congratulated BMA CEO Jeremy Cox and his team for persuading the EU to grant Bermuda equivalency.

And he said the US National Association of Insurance Commissioners has also designated Bermuda and the BMA as a “qualified jurisdiction” which allows free cross-border trade with America, the world’s second largest trading bloc.

Mr Kading added: “This bilateral recognition by the world’s two largest trading blocs ensures Bermuda’s status as one of the three leading reinsurance domiciles in the world and it positions Bermuda well for continued recognition by the International Association of Insurance Supervisors which is currently substantially rewriting its own multilateral international regulatory standards.”