Bermudians need not fear the future for its insurance markets in the face of the global tax initiative, said the man heading the transformation of Lloyd’s of London.
He is determined to make Lloyd’s and London the centre of the insurance world and sees Bermuda as a part of that future and unlikely to be caught up in an onshore/offshore turf war.
“Bermuda is way beyond tax,” the CEO of Lloyd’s, John Neal, said during a recent visit to the island.
“The credentials and capability of the financial services market here are so well proven. The Bermuda market has credibility globally, brilliant talent in terms of its ability to execute for insurance and reinsurance, great distribution opportunities and still has capital and tax advantages, whatever happens.
“So in terms of how Bermuda and London partner up, tax is a small part of the consideration. Bermuda is great for reinsurance, brilliant for ILS (insurance linked securities), fantastic for captives, and I think, has an incredible future ahead of it.”
“In some ways, the tax debate is a moment in time, a bit of a distraction.”
As an insurance man who worked in London, America and Australia, Neal knows a great deal about the tax debate and Bermuda, because he watched both grow and mature.
He was running QBE down under, when Australia decided to apply Pillar two requirements in 2011.
For capital reasons, QBE was running their captive interest through Bermuda but Australian authorities had other thoughts.
“They told us they didn’t care what we were doing in Bermuda. They were going to tax that business as if it was written onshore in Australia. You turn around and go: ‘Wow!’”
“But you know it doesn’t matter.
“It’s a hard conversation at this moment in time but it doesn’t really matter, because Bermuda is so much more than tax. My sense is that the momentum behind that debate is so strong, the debate has already happened.
“People here might feel a little vulnerable to that, but I don’t think Bermuda will miss a beat. I don’t think it will change the business. I think quite the reverse. I think Bermuda has a huge opportunity to grow. That’s my personal view.”