Analysts see Bermuda’s proposed corporate income tax as “a modest but manageable negative” for insurers and reinsurers domiciled on the island, according to reporting from Business Insurance.

The Government has opened a consultation period as it considers implementing a new corporate income tax regime as part of its work to address the Pillar 2 requirements agreed by the Inclusive Framework of the Organisation for Economic Co-operation and Development.

Analysts at Baltimore-based Keefe, Bruyette & Woods Inc, led by managing director Meyer Shields, reportedly said the current hard reinsurance market will likely mitigate the effect of an income tax.

The analysts are quoted by Business Insurance: “In the near term, we think that reinsurers — especially for property catastrophe reinsurance — retain significant pricing power that would allow them to largely incorporate a Bermuda corporate income tax in pricing.”

The new tax would be in line with global measures proposed for 2025, affecting Bermuda businesses that are part of multinational enterprise groups with annual revenue of at least €750 million ($820 million).

The move comes after a global minimum tax rate of 15 per cent was brokered by the OECD.

The consultation document suggests Bermuda’s corporate income tax rate for the targeted multinational companies could be between 9 per cent and 15 per cent.