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Bermuda's captive management industry provides an excellent captive infrastructure and captive management services, according to risk managers polled in the First Annual Bermuda Captive Conference Risk & Insurance® Survey.

While respondents identified few problems with the typical services provided to captives from bankers, lawyers and accountants, they were also comfortable with the island's political climate.

The majority of the survey respondents, at least 80, said they operated single-parent captives. The remainder owned segregated cell captives and rent-a-captives.

Survey respondents were based in more than 25 states and the District of Columbia, operating captives from as far west as California and Washington, and from as far north as Minnesota and Wisconsin.

Owners based in 10 foreign countries responded to the survey, as well. Those countries were: Belgium, France, Canada, the United Kingdom, Sweden, Brazil, Japan, Australia, Mexico and Switzerland.

Informed risk managers know that the island has maintained a prestigious reputation and momentum of growth in the insurance and reinsurance world, even as competitors have continued over the last 30 years to predict its doom.

Even today, risk managers knowledgeable of the island smile when they hear other jurisdictions compare themselves to Bermuda, or mischievously claim the island is "full."

The truth is that with the nature of the captive insurance business, managers expect to continue attracting new captive business for decades. And much of that comes from the many years of successful insurance innovation and continued development in the captive arena.

Bermuda pioneered the captive insurance industry in the 1960s and 1970s and continues to be its spiritual leader and front-runner by the numbers.

ONE-STOP SHOPPING

Infrastructure was a key factor for many survey respondents. Bermuda's clients have for years spoken highly about the layout of the city of Hamilton, enabling a mere walk within the one-square-mile city to get to all of their meetings.

It's not just that there is a plethora of captive management services offered by a large number of companies, but that they are easy to get to. It is easy to get from one meeting to the next, as well.

Nearly all, 98 percent, of respondents felt that the infrastructure in Bermuda was either good, excellent or exceptional. Many saw the island's infrastructure as the reason to do business there. Respondents raved about the island's abundance of services, management expertise and captive management staffing.

Not only do clients find significant expertise with their captive managers in Bermuda, but they find satellites of their global brokers on the island, together with expertise in accountancy, law and banking. They also see captive reinsurance opportunities. All of these opportunities in one place make it easier to get things done.

The island's captive management services also scored highly in the poll, with 94 percent of the respondents happy with the current state of affairs.

Bermuda is renowned for its ability to offer some of the most qualified professionals in the captive insurance business. One respondent said that Bermuda's biggest strengths are the "services that support the captive." Another cited the "concentration of service providers." A third said Bermuda offers "excellent captive management services."

"Captive managers are extremely customer focused and pride themselves on providing superior service to their clients," said Bill Baxley, vice president and treasurer of Freeman Co., a Dallas-based provider of corporate event services.

"They manage their charges as if they are their own, and that produces not only an excellent work product, but significant loyalty from their clients," said Baxley, who's worked with three captives on the island.

The survey also indicated a very high satisfaction with the general business climate. In fact, more than nine out of 10 of the respondents said the island's business climate was good to exceptional.

Other countries have lauded the island for its "know your customer" policy, where background checks are made to deter unsavory business opportunists. This selective business acceptance has been a cornerstone of Bermuda's reputation as a pristine and highly regarded jurisdiction.

From educated regulators to business people in the know, Bermuda has long been regarded as a top-shelf place to do business, because of the tradition of British law and the interest in propriety.

With insurance regulations that are strong, but fair, captive owners know they can get business done, without unnecessary red tape or undue hardship. Survey respondents used terms like "reasonable regulations" and "integrity of regulation" when describing the island's regulatory climate.

Dale Creech, chief legal officer of Premier Health Partners, a Dayton, Ohio-based insurer of hospitals and physicians groups that has operated two captives based in Bermuda for more than a decade and is planning to operate a third, said that one of Bermuda's major strengths is the government's flexibility and willingness to work with captive owners and managers.

"Everything we've gone to the government with a business plan to do, they have approved, not rubber-stamped," he said. "They've asked good questions--reasonable questions--not in an atmosphere of, 'We're not going to let you do this,' but genuinely probing to make sure it made business sense."

October 1, 2006

Copyright 2006© LRP Publications