Members of Bermuda's insurance industry said yesterday that this pillar of the Island's economy would continue to show growth and innovation.

The Island's 1996 insurance company incorporations showed Bermuda was carrying huge momentum, said Johnson & Higgins (Bermuda) Ltd. senior vice president Roger Gillett.

Last year, 97 insurance companies -- 35 percent by market share -- incorporated in Bermuda compared to Guernsey with 40 and Cayman with 39.

Mr. Gillett, also chairman of the marketing committee of the Island's Insurance Advisory Committee, said Bermuda's market share should grow by at least one or two points in 1997.

"I can see nothing to halt Bermuda's dominance in 1997.'' He also said that 40 percent of the world's captive insurance companies were in Bermuda.

"People are looking at their businesses. Many are selecting a captive as the favoured vehicle to move them from where they are today to where they want to be,'' Mr. Gillett said.

Captives also had substantial unutilised capacity, he added.

In future, possibly in a harder market, there was a possibility captives might pool capacity offering solutions with their combined capital, he said.

"Parent companies want to see that capital put to use.'' Asked about US President Bill Clinton's proposal targeting captive insurers, Mr. Gillett said: "It is a threat (to Bermuda captives).'' The proposal includes provisions altering the definition of insurance by requiring writing of more third party business. A captive would generally not qualify as an insurance company if more than 50 percent of its net written premium were derived from insuring or reinsuring risks of its shareholders.

Reforms are needed because of claims of uncertainty under current laws as to when transactions with captives are considered insurance for federal income and excise tax purposes.

Mr. Gillett added that, if necessary, "Bermuda will come up with solution.'' On future insurance opportunities, Bermuda Registrar of Companies Kymn Astwood said securitisation of insurance risk was an area where the Island could excel. "My hope is that Bermuda will be the leading domicile for these products,'' he said.

Mr. Astwood also said that in 1996, Bermuda saw many incorporations originating from non-traditional markets like Korea, Hong Kong, Japan, South Korea, Canada and the Caribbean. Last year, the register added at least one new insurer from each of these jurisdictions. Traditionally, new incorporations have come from the US, UK and Europe.

Growth in the developing countries was anticipated to outperform growth in the developed countries by 75 percent, he said. "We are positioning ourselves to take advantage of these opportunities.'' On Bermuda's property casualty market, Chubb Atlantic Indemnity Ltd. president John Stites said it was important to look at who sponsored many Bermuda companies in this arena: "They are the survivors going forward.'' He also said that: "Bermuda companies are the best capitalised in the industry.'' Renaissance Reinsurance Ltd. senior vice president Neill Currie added that Bermuda's property catastrophe reinsurers' involvement with the California Earthquake Authority (CEA) reinforced the Island's role as a key player in new products.

Triangle Brokerage Ltd. managing director Peter Dunne said he saw additional carriers, new lines of coverage, a greater role at Lloyd's, and strategic alliances among Bermuda's future moves.

BERMUDA INSURANCE SYMPOSIUM BUSINESS BUC