Multi-sector growth shows resilience of Bermuda’s financial services sector
First half statistics released by the Bermuda Monetary Authority demonstrate the continued strength of the island’s financial services industry and its ability to generate growth despite the uncertain global outlook.
Shelby Weldon, director of licensing & authorisations at the authority, says the latest data indicates that Bermuda’s reputation as the Silicon Valley of the risk industry is well deserved.
He says the qualities that had helped transform Bermuda into an insurance powerhouse – experienced regulators, quality service providers and a culture of innovation – are also contributing to steady growth across the broad range of financial services businesses.
“So far in 2014, we have registered 33 new investment funds,” says Weldon. “These positive results come on the heels of a concerted effort by the jurisdiction to modernise Bermuda’s asset management regime, including the introduction of two new fund classes, Exempt Class A and Exempt Class B Funds (of which we registered 13 new funds during H1 2014.) In addition, the authority expects to issue a consultation paper addressing Europe’s Alternative Investment Fund Managers (AIFM) initiative by Q4 2014. We also registered two new investment business licences during H1 2014, already meeting levels reached during the whole of 2013.
“On the insurance side, we have seen a number of innovative new vehicles being formed. In March 2014, the first ever African catastrophe insurance pool, African Risk Capacity Insurance Company Limited was launched with much fanfare. Bermuda beat out all other domiciles to be the home of this groundbreaking entity which will help African Union member states cope with the impact of extreme weather events and protect food insecure populations.”
Some of the other specialised risks covered by Bermuda’s new captives include property cover for a fleet of seismic recording ships, and product liability coverage for a company involved with the sourcing, manufacturing and sale of agricultural goods.
In total, the BMA registered 36 new insurers for the first half of 2014, a six per cent increase from the 34 firms registered during the same period last year.
New companies included: seven new captives; eight commercial insurers; five long-term (life) insurers; and 16 special purpose insurers (SPIs). This compares to nine new captives, two commercial insurers, three long-term firms and 20 SPIs registered in H1 2013. The BMA also registered eight intermediaries, an identical amount to the same period last year.
“It is good to see growth in the commercial and long-term sectors,” says Weldon. “It is not surprising to see SPI registration numbers declining slightly. The authority is aware of a number of SPIs that are currently registered but which still have to activate because participants are waiting to enter the market at the right time.
“Bermuda stands out from other financial services domiciles because we can cater to every aspect of international business, from insurance to asset management. Bermuda offers it all.”
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