The Bermuda re/insurance market paid out $1.25 billion in claims resulting from 2010’s catastrophic windstorm Xynthia — a 37 per cent share, Deputy Premier and Finance Minister ET (Bob) Richards said in a speech to the Bermuda Society in London last week, and called the role of the Island’s industry “indispensable” to the global economy.

Mr Richards went on to say that the Bermuda market had also paid out $222 million in claims for the Air France Southern Atlantic disaster, $800 million for the Costa Concordia ocean liner accident and $600 million for the Buncefield oil platform fire.

Mr Richards said: “Today, Bermuda fulfills an indispensable role in the global economy by protecting people and business against catastrophic events. The protection from such risks frees up investment in productive enterprises around the world and thereby fosters global economic growth.”

He also said: “The US rating agency Standard & Poor’s regularly analyses Bermuda, and they say Bermuda boasts 16 of the top 40 reinsurance companies in the world; two in the top ten.

He explained that in comparison Europe has 11 of the top 40; and the USA has six of the top 40.” Bermuda’s share in global reinsurance premiums is 16 per cent, compared to Europe at 56 per cent, USA at 19 per cent and Asia at nine per cent.

In the property and catastrophe market, Bermuda is the single most important market, with 37 per cent of the risk being placed here.

The Bermuda market supports nearly half a million jobs globally, Mr Richards told his audience. He said: “In fact, Bermuda’s contribution to the global economy more than merely protects against risks that inhibit global economic growth.

“Bermuda’s economic model actually creates and supports jobs, not just in Bermuda but in our onshore trading partners. Noted economist Charles Ludolph, former senior economist in the US Commerce Department, conducts economic studies on the impact of Bermuda’s international business sector on onshore economies. In terms of employment, he estimates Bermuda-based enterprises support in excess of 350,000 jobs in the US and upward of 100,000 jobs here in the UK.

“All over the world business people and investors are continually searching for that compelling value proposition to invest in. I think you can now agree that Bermuda’s international business sector provides a compelling value proposition to the world economy.”

Mr Richards said that despite its critical global role, Bermuda business faces a “hostile environment”.

“The great recession has put great stress on many institutions which have heretofore carried the aura of functionality,” he said.

Saying “the cracks have been laid bare for all to see”, he pointed to bilateral tax agreements as one of those institutions.

“The system of bilateral tax agreements never anticipated the information age. It was built to handle the taxation of trade in physical products. The age of the internet has changed all that and the system can’t cope,” he said.

Mr Richards explained that unlike most other nations, Bermuda’s tax system is designed for a country “that imports virtually everything”.

He added that “our tax system — and we do have taxes — was built on taxing imports — a system that dates back over 100 years.

“Customs duties still form a major component of our tax revenues as well as payroll taxes and a myriad of different fees. So the notion that Bermuda has geared its tax system to attract offshore business is false. But if you listen to some commentators you would think that not charging corporate income tax is downright immoral.

“Bermuda Government revenues total about 16 per cent of GDP. By comparison, US federal tax revenues total 19 per cent of their GDP — same ballpark.”

He also pointed out: “We do not differentiate between international companies domiciled in Bermuda and local companies, so-called ring fencing certain companies for tax purposes. All companies are treated the same insofar as our taxes are concerned.”

Mr Richards told the audience: “I have been forthright in my conversation with you this evening because I am in the company of friends — friends of Bermuda.

“Bermuda is living in a hostile international environment and we need your help in telling the real Bermuda story. There is so much disinformation out there in the popular media. Help us tell the real Bermuda story and you will help Bermuda.”