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Bermuda is already home to some major industry players, and now it can become a bigger international re/insurance hub due to the UK’s impending exit from the European Union (EU), one expert claims.
Chris Garrod, a director in the corporate department at law firm Conyers Dill & Pearman, told the Bermudan newspaper Royal Gazette that UK insurers are looking to join the list of companies domiciled in the British island territory.
“As a result of the volatility caused by the Brexit vote, we are already starting to see some increasing interest from insurers with UK/Lloyd’s operations who are seeking to set up operations here and write new business from the island, setting up offices here and hiring staff,” Garrod, a member of the Bermudan firm’s insurance practice, told the paper.
Garrod was also quoted in the report as saying that Bermuda “will become an even greater, accessible rival reinsurance hub than ever before, attractive to capital markets and investors.”
He said an upheaval in the reinsurance market can be expected, with many raising concerns over increasing regulatory and compliance burdens.
“When the UK does eventually exit the EU, there will be queries over London’s future as a global centre for the industry, with re-domestication being one of the avenues many businesses may now investigate,” the Royal Gazette quoted him as saying.
Garrod noted that Bermuda is on a level playing field with European competitors since it already gained Solvency II equivalence in the EU.
The Brexit move has fuelled speculations of an exodus of insurance and financial companies from the UK. Just last week, accountancy firm KPMG reported that 76% of British CEOs are considering moving their businesses.
Lloyd’s of London chairman John Nelson also previously said that the specialist insurance market would set up another shop elsewhere in the EU, though he claimed that Lloyd’s will still be “centred” on the UK capital.
This article was first published in Insurance Business, October 2016.