Ninety per cent of the globe’s ocean-going tonnage is reinsured in Bermuda, the Bermuda Captive Conference was told.

In a session on Bermuda mutual captives, Tawana Tannock, managing director, Skuld Mutual Protection and Indemnity Association, explained this is because the world’s largest P&I club collective, the International Group of P&I Clubs, reinsures and domiciles in Bermuda.

The group has 13 members including Skuld, Steamship Mutual and Gard.

“It is extraordinary that we have risk-sharing upon risk-sharing,” said panel moderator Michael Frith, Carey Olsen chairman senior counsel. “So the P&I clubs themselves are risk-sharing vehicles, and then you have a risk-sharing vehicle for the reinsurance of those P&I clubs.”

Marine insurer Skuld first came to Bermuda in 1978 at the height of the Cold War.

“Bermuda was considered a sophisticated, mature jurisdiction that was removed enough from Europe and the communist threat,” Ms Tannock said.

“Skuld decided that Bermuda was a stable jurisdiction. It was respected, and they trusted the governance.”

She said Skuld stayed because of Bermuda’s stable regulatory landscape and trustworthy governance. In 2019, a board member suggested Skuld move operations to Cayman, and was quickly shut down.

“Bermuda had this desire to be compliant and try to work with our companies and also had a governance structure that was respected,” she said.

At that time Cayman was on the Organisation for Economic Co-operation and Development’s blacklist of non-cooperative tax jurisdictions, while Bermuda was on the OECD’s grey list of regions that do not comply with all OECD tax criteria, but are committed to reform. Bermuda was moved to the co-operative list in 2022, a year before Cayman.

Ms Tannock said other firms, such as Ark Bermuda, are also continuously assessing their presence here and choosing to remain.

Ark Bermuda started underwriting as a Class 4 licensed insurer in 2021, has an AM Best rating of A and underwrites casualty, property, speciality and marine, energy and composite.

“They have had multiple assessments that have determined, each time, that Bermuda is the place to be, and they want to stay,” Ms Tannock said.

During the conference at Pier Six on Front Street in Hamilton, an audience member asked whether P&I clubs get a vote on which companies join the group.

Ms Tannock said they do not, but can bring pressure on clubs or board members they want to remove. She mentioned the pressure that the Ukraine war brought to P&I clubs.

“When the Russian sanctions were instituted, we had a large portion of Russian private yachts that we insured, and we also had a Russian board member,” she said.

The board was bonded, but made the difficult decision to ask the Russian member to leave.

“We had to say we cannot continue to do business with you; come off the board,” she said.