Business leaders and the legal world warned that the island faces a period of “unprecedented uncertainty” as Donald Trump takes over as US president tomorrow amid campaign pledges of tax cuts and protectionism.

One senior reinsurance figure said: “There are some things being proposed in the US tax reforms which could be damaging to Bermuda.

He added: “Everyone is concerned about it and I believe if there is a significant tax levied on providing insurance or reinsurance from outside the US to inside the US, it could be very damaging to the international, global insurance and reinsurance industry. And Bermuda would not be alone in being harmed by that.

“Trump is different from anything that has come before and Trump seems to be rewriting the rule book. whether it’s tweets or how he handles his personal affairs.”

And he predicted “a noticeable drop” in the creation of new Bermuda companies and even in mergers and acquisitions on the island “until there is some clarity here”.

The reinsurance expert said: “There is this concept of border adjustments which has our attention. It remains to be seen how it plays out.”

But he explained that Trump’s platform of “making America great again” revolved around taxing imports and subsidising exports.

The insurance figure added: “The border adjustments is the general framework about having some kind of value added tax system.

“There is nothing personal, nothing anti-Bermuda, nothing anti-insurance or reinsurance about it.”

He said: “There is a very high probability — north of 90 per cent — that there will be major tax reform in the US.

“To some, this is a once-in-a-lifetime opportunity to make big changes and they are needed. The US corporate tax rate is very high and it makes a whole lot of sense to lower it.

“That makes sense for the US and I don’t think that is a threat to Bermuda at all.

“The drivers for being here are a very sensible and robust regulatory environment and the speed — you can have a dialogue to get things done with the regulators. Bermuda’s experience and speed to market are the drivers for a lot of the business around here.

“Having no corporate income tax certainly adds to the proposition, but it’s not the main driver. The US corporate tax coming down erodes the value proposition, but it’s not the driver.”

He added: “As long as insurance and reinsurance is carved out of any VAT or border adjustment tax, I believe Bermuda will end up in a pretty strong place.”

The reinsurance expert, who asked not to be named, predicted that any changes in corporate tax in America would likely happen in the early months of the Trump presidency.

He said: “After this tax reform is finished, to the extent that nothing terribly damaging has happened, it will be a shot in the arm for Bermuda.

“There will be a period of stability and further acceptance of Bermuda’s already high acceptance.”

But he added: “I don’t want to wholly sugar coat it — there will definitely be change. If it’s not favourable, I believe it could hurt the environment here.”

The reinsurance figure said that 2017 would be “a very significant year” for Bermuda, with not only a new and maverick US president but also the negotiations for the UK to leave the European Union — Brexit — as well as a likely General Election on the island.

The reinsurer added that business in Bermuda realised that the best way to head off potential threats was to lobby major US players to highlight that punishing the sector would “cost American consumers and damage the economy”.

He said: “We need to focus on how Bermuda has helped the US in the past. We have been responsive to all sorts of disasters in the US in the past and spread of risk is good.

“The concept I have heard, which I really like, is that an international insurance or reinsurance company provides a service in the US. It’s not importing a service, it’s exporting risk.”

A senior lawyer in a firm with major expertise in international business and insurance, who also declined to be named, added: “The future is as uncertain as the past year was.

“But we should never underestimate Bermuda and its ability to reinvent itself as it has done a number of times.”

He added, however, that the combination of Brexit and a Trump presidency “could present challenges for Bermuda’s offshore model, given the prospect of significantly lower US corporate tax rates, which significantly reduce the advantage of being offshore in terms of tax differentials”.

The lawyer also pointed out that the new US administration had promised an amnesty and reduced one-off taxes for money repatriated to the US from outside the country.

But he said that would more likely hit jurisdictions like the Caymans and British Virgin Islands than Bermuda.

And he added: “The big insurance companies here are not going to take decisions in a hurry. The fact that the Trump administration slashes corporate tax, that’s not necessarily going to be a long-term state of affairs.

“Trump may not be around for more than four years and it’s quite possible to envisage a scenario where he is around for much less than four years.”

He added that the US midterm elections in November next year may also reduce Trump’s ability to get new measures through the legislature.

And he said: “We are about to enter a period of unprecedented uncertainty but I’m optimistic that Bermuda will be able to weather the storm and find ways of diversifying itself as it has done in the past.”