Roger Crombie

How large is Bermuda's insurance capacity compared with that of Lloyd's or the Cayman Islands'? While Lloyd's is not the only London market, it is the premium insurance market in the world, or so we are told. Would it surprise you, therefore, to know that Bermuda's insurance capacity is more than twice that of Lloyd's?

Figures recently released by the Bermuda Insurance Supervisor and a common sense update of those figures suggests that Bermuda might today be approaching three times the capacity of Lloyd's.

You're thinking that my calculator. needs new batteries, so here are the official figures as released. Lloyd's, in its most recent advertising blitz, says its 2003 underwriting capacity is $23.2 billion. In other words, if Lloyd's were to write every penny of coverage of which it is capable, its capacity this year would be $23.2 billion. In the year ended December 31, 2001, Bermuda's actual capacity--the value of net written premiums booked that year--was $41.6 billion.

Okay ... so the figures are out of sync. Lloyd's numbers are more recent than Bermuda's.

But bear with me and my simple calculations. In the final quarter of 2001, some $18 billion in new capital was attracted to, or promised for, the Bermuda market. Little of it was at work when the December 31, 2001 count was made. Not all of it is committed even now, but much of it is, which probably pushes the 2003 capacity of the Bermuda market close to or beyond $50 billion. Bermuda's insurance sector grew by a third in 2001; Lloyd's contracted in 2002.

P.R. Machine Purposely Adrift?

Such figures tell us one thing, for sure: Lloyd's has a better public relations machine than Bermuda's. Everyone in the world has heard of Lloyd's of London, whereas only business people, and insurance people at that, know how seriously Bermuda takes insurance these days.

Bermuda's insurance industry, in fact, has little public relations machinery. The central body, the Insurance Advisory Council, concentrates on insurance issues, rather than marketing, The Bermuda Insurance Institute is an educational facility; its advertising budget for the Bermuda market is zero. The Bermuda International Business Association, BIBA, promulgates a certain amount of marketing, but not much. Lately it has focussed its efforts on financial disciplines other than insurance. The Bermuda government is effectively broke, and advertising is the last thing on its mind. Why does Bermuda hide its light under a bushel?

Too Publicity Shy

The answer is fear. For a long time, most Bermuda insurance insiders shared the view that if everyone knew of its success, envy and politics might combine to its disadvantage. Then came September 11, 2001. Bermuda, in effect, saved the world. The phrase is not mine alone: Jack Bogardus, a former Alexander & Alexander chairman and the author of an excellent history of the North American property sector said exactly that recently.

Bermuda is the 800-pound gorilla of the modern insurance world. Its capacity is 10 times that of its nearest offshore competitor, the Cayman Islands, which is an entirely different market many miles away, but still ...

There remain those in Bermuda who believe that news of its power should be kept secret. I am in the camp that says, "If you've got it, flaunt it." Let's do just that.

Bermuda is the most efficient, dynamic, fastest-growing, most accessible insurance market in the world, and it is perhaps the sunniest insurance market in the world. New York and London have more movie theatres and more space, but with their millions of citizens and centuries of tradition, neither can hold a candle to Bermuda in the field of creative, innovative insurance solutions.

Go anywhere else at your peril.

Roger Crombie, our regular Bermuda correspondent, can be reached at crombie@northrock.bm.

COPYRIGHT 2003 Axon Group

COPYRIGHT 2003 Gale Group