2010 Outlook: Ils Markets In Bermuda & Cayman

Kevin C. Butler, Michael Frith • Posted 17/02/2010 • Under Articles

The Insurance-linked securities market continues to play an important role in the insurance and financial services industries in both Bermuda and the Cayman Islands. In the past year, there has been a renewed interest in ILS structures such as cat bonds, driven in part by the need to diversify investments and risk transfer strategies, but also helped by recent regulatory developments designed to facilitate such structures.

As jurisdictions, both Bermuda and the Cayman Islands maintain the advantages of tax neutrality, independent location for international investors, light yet effective regulation, accessible and pragmatic regulators and sophisticated service providers that are responsive, timely and thorough. Both jurisdictions are very well-established and respected international financial centres, and both continue to demonstrate their skill at financial innovation. In the sophisticated ILS sphere, these are vital qualities, and when combined with the regulatory enhancements described below, they provide an ideal environment for the continued development of the ILS market.