The IBC's 2nd annual International Conference on Captives ended yesterday, and professionals in the sector re-emphasised Bermuda's continuing strengths as a domicile of choice.

During a discussion of new products and services in the alternative market, panelists agreed that while tax advantages helped make the Island attractive, the regulatory climate was the key factor in fostering growth.

"I'm very bullish on Bermuda's regulatory climate,'' Swiss Reinsurance America Corp. senior manager Brian Kawamoto said yesterday. "In particular what I'm impressed with is the investment in intellectual capital over the last seven years. There are a lot of smart people here.'' Captives conference ends One of the companies that has benefited from that climate has been Centre Solutions (Bermuda) Ltd., formerly known as Centre Re, and one of the Island's success stories. George Hutchings, the company's vice president of underwriting, views tax advantages as an added benefit to the regulatory regime and to the corporate infrastructure.

"The regulatory environment is one of our main reasons for being here,'' he said. "We continue to see excellent opportunities to do business that we could not do anywhere else. The tax reason is an added benefit. The marketplace helps. It's not unusual for us to seek capitalisation from our competitors for some of our programmes.'' Centre Solutions was a focal point for that particular panel discussion, and served as a standard for the continuing evolution of the Bermuda market to meet clients' needs using alternative methods.

Here, Bermuda has adapted its regulation to try and foster growth of these products and make the Island the leading market for securitisation. Bermuda amended its insurance legislation this year to allow persons and entities who are not registered insurers under Bermuda law to invest in insurance derivatives. The amendment provides for certain contracts, instruments or securities to be classified as "designated investment contracts''.

Some of those alternative insurance methods include the securitisation of risk, the melding of financial market and insurance products. The aim is to provide an integrated solution to a client's overall risk exposure, rather than using the traditional approach of providing a bunch of policies for isolated sets of risks.

"It's the transition from buying towers of coverage on any risk profile that's measurable, to an integrated, seamless contract,'' Mr. Kawamoto said.

"...As a seamless contract it's a true work of art. As opposed to a stapled contract with 10 different policies, you begin with one sheet of paper.'' It's a move away risk transfer to risk financing.

"It's a security, not insurance,'' he said.

While the contracts may be a "true work of art'' they're complicated to put together, requiring a lot of human resources from both the client and the provider, Mr. Hutchings of Centre Solutions warned.

"It's a solution that is radically different than that approached from a reinsurer,'' he said in describing Centre Solutions programmes. The objectives are similar -- but the end result depends on data, human resources and patience. Some of the contracts have taken six to 18 months to put together.

Centre Solutions is currently working on one that has been three years in the making. At one point panelist Hugh Rosenbaum, a principal at Tillinghast-Towers Perrin, asked Mr. Hutchings what made Centre Solutions so successful.

"It's really the attitude that the organisation takes when looking at issues,'' Mr. Hutchings answered. "It's a sense of irreverence that helps in putting together transactions that truly adds value to the organisation.'' Mr. Rosenbaum shot back that Mr. Hutchings had not really answered the question.

"It's because you're good at mobilising other people's capital,'' he said.

Perhaps this answer in general captures the direction that the Bermuda reinsurance and insurance market hopes to evolve toward, as the Island's companies seek to thwart the onslaught of hungry competitors.

About 130 people attended the three-day conference at the Hamilton Princess which ended yesterday.