Bermuda notched up one-fifth of all offshore deal value last year.

And the island was home to the biggest transaction of 2016, according to Offshore-i, published by law firm Appleby.

But the total volume and value of offshore deals was down on the previous year, in line with other offshore jurisdictions.

Timothy Faries, Appleby Bermuda managing partner and group head of corporate, said: “Bermuda was again a major hub for offshore dealmakers in 2016 and recorded the year’s biggest transactions in the insurance and mining sectors.

“We expect this momentum to continue, with many key drivers of a healthy dealmaking environment remaining in 2017.”

Bermuda recorded 420 deals worth a total of $46.8 billion in 2016, representing 20 per cent of total offshore deal value.

This included the biggest offshore deal of 2016 — the $6.3 billion purchase of Bermuda-based Endurance Specialty Holdings, a global speciality provider of property and casualty insurance and reinsurance.

Hong Kong-based CMOC Ltd acquired Bermuda-incorporated mining company Freeport-McMoRan DRC Holdings for $2.8 billion in another local transaction among the top ten biggest offshore deals in 2016.

Bermuda’s new Limited Liability Company Act, the first new corporate structure available in 100 years, is expected to add another degree of flexibility for corporate transactions in 2017, according to the report.

In total, there were 2,895 deals targeting offshore companies in 2016, representing a total value of $234 billion, the report found.

Each deal in the offshore top ten was worth more than $2 billion, and the region saw a total of 46 transactions in 2016 each worth at least a billion dollars, double the typical total seen as recently as five years ago.

Outside of insurance, the real estate sector also featured prominently in the top ten offshore deals of the year, with the biggest being the $4.5 billion sale of CITIC Real Estate Co & Tuxiana Corporation, incorporated in the British Virgin Islands and China, to China Overseas Land & Investment.

The British Virgin Islands and Hong Kong were the standouts of the year as the only two offshore jurisdictions to see an increase in activity over 2015, the report found.

The report said four factors will determine whether offshore M&A levels improve in 2017 — progress between EU and UK officials on establishing a new relationship, changes to the international trade and immigration policy out of the US, China’s ability to manage its economic slowdown; and progress in the eurozone’s continued economic recovery.

Though the primary focus of Offshore-i is on transactions in which offshore targets are purchased by investors, the report also examines deals in which the acquirer is based offshore. For the last five years, the volume of acquirer deals involving offshore-incorporated buyers has increased steadily and is now at the point where more transactions are flowing out of offshore jurisdictions than are flowing in.

The year 2016 recorded 3,127 such deals worth a cumulative $339 billion.

Bermuda saw a 10 per cent rise in the value of deals involving a local acquirer and highlighted a trend towards Japanese companies setting up Bermuda subsidiaries to buy up Japanese assets.

Cameron Adderley, partner and global head of corporate at Appleby said: “As with inbound deals, we see a healthy spread of sectors represented in the top ten deals of the year involving an offshore acquirer, including energy, transport, data processing and software publishing.

“Dealmakers are establishing holding companies offshore to take advantage of the many technical, legal and regulatory advantages of these jurisdictions, and then using those companies to make acquisitions, sometimes back in their home country.”