After a Difficult 2009, Bermuda Looks Towards New Year and ILS

Chris Westfall
Chris Westfall

Despite shares being off nearly 40 percent from the previous year, the Bermudian Stock Exchange (BSX) remains optimistic about growth for 2010 and sees insurance linked securities as a key drive for its recovery.

“The BSX’s listing business has remained buoyant and the BSX has made continued progress in entering and supporting the insurance linked security space,” said a statement from the island’s stock exchange.

The Royal Gazette/BSX Index ended 2009 at 2072.41 which is 39.35 percent lower than 2008, according the the exchange.

The BSX total market capitalization as of December 31, 2009 (excluding fund listings) stood at over $225 billion and total trading volume for the period was 5.7 million shares. The value of shares traded was cut in half year over year; $50.9 million in 2009 compared to $101.5 million for 2008.
“2009 continued to be a challenging year in the global financial markets,” said Greg Wojciechowski, BSX president and CEO. “[S]ignificant work has been undertaken by stakeholders to ensure that Bermuda’s regulatory and operating infrastructure remains in line with international standards and changes are made when and where necessary to strengthen this foundation.”

As part of plans to expand its attractiveness to international insurers, Bermuda approved the 2009 Insurance Amendment Act last October. The new regime allows for the creation of special purpose insurers (SPI), a designation that Bermuda hope will attract catastrophe bond listing away from the dominant position of the Cayman Islands Stock Exchange.

“I have every confidence that the hard work that has been done in Bermuda to create a commercial and regulatory environment that supports innovative business transactions and solutions will be rewarded by the markets through an increased flow of new business to the jurisdiction,” Wojciechowski said.