Insurance firms pumped $900m into Bermudan economy

By added on 07/08/2015

Bermuda’s international insurance sector pumped more that $900 million into the Island’s economy last year, reports the Royal Gazette.

The $901.5 million figure was up $14.8 million on 2013.

The figures came in the annual economic survey by the Association of Bermuda Insurers and Reinsurers (Abir).

Abir board chairman Stephen Catlin, the executive deputy chairman of XL Catlin, said: “Commercial insurance and reinsurance is the largest private-sector driver of the Bermuda economy.”

The survey found that Abir’s 20 member companies employed 1,513 people in 2014, down three people on the previous year.

A total of 1,007 of the employees were Bermudian.

But Mr Catlin warned: “The trend towards consolidation continues and this will affect the industry’s local employment.”

Abir president Bradley Kading said the total economic contribution of the sector included travel and entertainment expenses, payment for professional services, charitable contributions, real-estate costs and payroll tax. The biggest single contribution to the economy was from construction and real estate, including housing costs, with Abir members spending around $124.7 million — up $17.2 million on 2013.

A further $66.1 million was spent on professional services and consulting fees, down $800,000 on the previous year.

And Abir companies reckoned they spent more than $28 million in Bermuda on hotels, airfares, in restaurants, catering and taxis, a drop of $700,000 on 2013’s figure.

The firms also contributed nearly $11.6 million in 2014 to Bermuda registered charities.

Mr Catlin said: “With the large increase in alternative capital vehicles taking on underwriting risk in Bermuda today, we have aptly demonstrated our capabilities as a global insurance incubator.

“Bermuda’s regulatory innovations and underwriting strength allows Abir members to bring great value to commercial insurance markets globally.

“Our contribution is to lead market innovation and make global markets more competitive.”

Mr Kading added that Bermuda’s leadership in alternative capital and the addition of three new underwriting firms in 2015 was a sign of “strong health in the market”. He said that the Bermuda Monetary Authority (BMA) had done “an excellent job” in creating a regulatory framework up to international standards.

He added that he was confident the Island would meet the European Union (EU) Solvency II requirements by the end of this year and, with US qualified jurisdiction status, Bermuda would be one of only two jurisdictions to have met markets tests in both Europe and America.

Mr Kading said: “This successful leadership on international standards of the BMA by CEO Jeremy Cox is essential for Bermuda to be the group supervisory home of Abir members.”