ABIR president Bradley Kading believes that the biggest US threat to Bermuda's insurance industry is likely to come from sweeping efforts to raise more tax revenue from all international business, rather than legislation that targets "tax havens".

Washington-based Mr. Kading, whose role with the Association of Bermuda Insurers and Reinsurers includes briefing US lawmakers on any legislation that might do damage to the Island's major industry, believes whoever becomes the next president will need to boost the federal coffers.

But he does not think lawmakers will pick specifically on Bermuda to find some of that taxation revenue because the costs would massively outweigh the benefits.

"Even our critics' estimates of how much more tax they could get from Bermuda amount to about $2 billion," Mr. Kading said. "So the US gets more from us in hurricane claims alone than it could ever get in tax.

"If they took that $2 billion out of the capital base of our insurance companies, it would reduce the insurance they could sell. If you pass that on to the consumer, then it would mean higher insurance prices."

A more significant threat from the new American administration, which will be led from next January by either Democrat Barack Obama or Republican John McCain, will come from the popular pressure for protectionist measures in hard economic times.

Coupled with the need to stall the growth of the burgeoning US national debt, that could see America looking to harvest more revenue from a wide range of overseas companies and countries doing business with the US.

"In the wider US political debate there is a theory that international trade has not been good for jobs," Mr. Kading said. "When they look for revenue-raising measures, it's likely they'll go after everybody in the international business field and we'll get caught up in it.

"The US Government needs more revenue and is borrowing money in a way that is no sustainable. The next administration will focus on programmes that will need funding. And the expectation is that 2009 will see moves towards national health insurance - whoever wins the election."

Every time legislation is proposed that might impact on Bermuda's insurance industry, Mr. Kading works on producing research papers to back up the Island's case and uses the facts to lobby Congressmen and Senators.

The reaction he gets from the politicians, he said, is mixed.

"They all have their own interests," he said. "Some - from both sides of the aisle - are free traders, who are not focused on attacking international business.

"Republicans tend to be against raising taxes, so they generally sympathetic. So are most people from hurricane-affected states."

Sixty percent of the insurance for Florida homes came from Bermuda companies, Mr. Kading said, while Europe provides a further 30 percent.

"Policy-makers from those kind of states understand they are wedded to an international market and they will oppose policy that would do something to harm it.

"However, some would choose to create a federal government programme to replace us."

Florida has led the way in trying to introduce catastrophe insurance programmes backed by public money in an attempt to slash the price of homeowners' insurance, which has rocketed as development has continued unabated in a state at high risk of major storms.

In trying to oppose such moves, Mr. Kading sees opportunities to glean support from politicians representing states far from the hurricane zone.

"People elsewhere are debating whether it is right that a farmer in Iowa should be subsidising the insurance of wealthy people in Florida building a condo complex on the coast and we find support from those people," he added.

Hazard mitigation legislation - including introducing tax incentives for people to storm-proof their homes - is one of the areas in which ABIR has been able to share the interests of politicians and consumer groups alike.

Two politicians visited by the Premier yesterday, Sen. Tom Carper and Rep. Bennie Thompson - are pushing such legislation.

Effective implementation of building codes and storm-proofing measures could cut claims by 50 percent, Mr. Kading said.

"That would dramatically reduce insurance costs and everyone would be a winner," Mr. Kading added.