Bermuda is an international financial centre with a significant reliance on the insurance industry and North American Geographic risks.
The present international trends of converging insurance, banking and investments operations as well as the opportunities for improved distributions created by e-Commerce provide many opportunities for Bermuda.
Bermuda's limited space requires a stronger emphasis on planning and management of growth in the international financial sector than would be the case in financial centres without our space restrictions.
Bermuda's strong "know your customer" policy of restricting the number of companies that are formed in Bermuda has provided it with an enviable reputation. The OECD and other initiatives have as a core their requirement for "know your customer" and in this respect Bermuda has a regulatory system in place that should be emulated by some of the larger financial jurisdictions.
Bermuda's e-Commerce legislation, which came into effect this summer, provides legislative clarification for legal issues of origin and form required for electronic transactions. The telecommunications companies like Global Crossing that have made Bermuda their home coupled with our e-Commerce Legislation and our auto mated stock exchange provide good building blocks to ensure that our financial services industry participates in the new wired world.
By reviewing why the Insurance industry has developed in Bermuda we will gain an insight into how we should position ourselves for the 21st century.
The reason the insurance business is growing so effectively in Bermuda is because the intellectual capital is in Bermuda. The islands high standard of living has attracted many companies to relocate or form their companies operations and locate their top executives in Bermuda.
This intellectual capital has encouraged others to come to Bermuda and created a marketplace which is not an administrative booking centre but a vibrant marketplace.
Bermuda's Insurance industry sees itself as a laboratory where new products and ideas are encouraged to germinate. Our regulatory system must continue to enable innovation to flourish and through our "know your customer" approach protect the consumers.
In my opinion Bermuda needs to look at the insurance model and apply it to both the banking and investment industries. Like insurance there must be a business reason to be in Bermuda. Because of Bermuda's limited space and a desire to diversify its geographical and industry risks it must be selective in targeting European, Latin American or Far Eastern financial services companies with a bias to non-insurance dominated institutions. The strength of the companies and the intellectual capital based in Bermuda is what will provide the business success of Bermuda in the 21st Century.
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