Tianjin is a Chinese port that many people in Bermuda may not even have heard of. Two months ago, a warehouse that stored thousands of tonnes of hazardous chemicals blew up there.

The series of explosions killed 173 people, generated blast waves that spread deep into residential areas, shattering windows for miles around, and incinerated thousands of new cars parked in an adjacent lot. The pollution impact was serious and may be lasting. All of this occurred 7,500 miles away, but it is very much Bermuda’s business.

Any doubt about that should be cleared up by a glance at the third-quarter earnings statements being issued by Bermuda’s major insurers and reinsurers. It seems most had significant exposures to this disaster. This week XL Catlin estimated a $96 million loss related to Tianjin and it was far from alone. Others that have put out estimates so far include PartnerRe ($60 million), Everest Re ($60 million), Validus ($43 million), Axis Capital ($30 million), Allied World ($30 million) and Aspen ($30 million).

Risks like this tend to be spread through the world’s commercial insurance markets, so it is no surprise that the big hitters in Bermuda are among those footing the bill. While these losses may be blows for the individual companies, they serve a powerful reminder of the value of Bermuda’s reinsurance industry to the world.

The Tianjin payouts are a drop in the bucket of what the Island’s reinsurers have contributed in claims in recent times. Over the past 14 years alone, the Island’s reinsurers have forked out more than $35 billion in catastrophe claims to US clients alone, according to the Association of Bermuda Insurers and Reinsurers. Of this amount, about $2.5 billion related to the September 11 terrorist attacks in 2001, $17 billion for Hurricane Katrina in 2005, $2 billion for tornado outbreaks between 2010 and 2012, and another $3 billion for Superstorm Sandy three years ago.

But as the losses announced for the Tianjin explosion clearly illustrate, the reach of the Bermuda reinsurance sector is truly global. The Island’s reinsurers bore some 37 per cent of the reported liabilities for Europe’s 2010 Windstorm Xynthia, 38 per cent for Chile’s 2010 earthquake, 51 per cent for New Zealand’s 2010 earthquake and 29 per cent of the reported liabilities for the internationally reinsured share of the 2011 Japanese earthquake.

At a time when offshore financial centres are under severe scrutiny as indebted major economies look to boost their revenues by closing tax avoidance loopholes, Bermuda’s reinsurance industry, combined with its insurance and captive insurance sectors, give the Island a trump card in its defence. This is a very real industry with a substantial physical presence on the Island. It has an excellent claims-paying track record and underpins economic activity in developed-world countries by shouldering a remarkable proportion of their risks.

Over the past four decades or so, a globally significant insurance and reinsurance marketplace has formed here, where brokers can speak with numerous reinsurers within a day or two with ease and place business efficiently. The industry’s presence and scale makes it difficult to argue that Bermuda is “just another tax haven”. It’s certainly true that one of the reasons the reinsurance capital has come here is because it is treated more favourably from a taxation standpoint than it would be in the US or Britain, for example. The benefit of more “efficient capital” is lower reinsurance rates, which in turn means insurers pay less for their reinsurance coverage and consumers pay lower insurance premiums.

Those benefits, as well as the claims paid out, feed directly into the pockets of consumers in the major economies, probably more than offsetting the tax revenue losses associated with the reinsurers being here rather than there. It’s a system that works for Bermuda and for insurance consumers around the world.

The case for Bermuda still being referred to as a tax haven rests on the presence of subsidiaries of major companies that have no physical presence and no employees here, but which are used as part of a corporate tax avoidance strategy. Bermuda gains little, bar some company and legal fees, from such entities, but suffers reputational damage from their existence. While the multinationals are not breaking any laws, there is little the Island can do to stop them setting up here.

The Organisation for Economic Cooperation and Development has signalled the intention of the world’s major economic powers to clamp down on such behaviour, with its Base Erosion and Profit Shifting (BEPS) project. The main targets will be the many multinational tech firms, drug companies and retailers who deploy inventive transfer pricing to shift profits to low-tax jurisdictions, far from where they make their sales.

Hopefully, Bermuda’s insurance and reinsurance industry will not be lumped in with those targets. We have a world-beating industry we should be proud of and long may Bermuda remain “the world’s risk capital”.