After a successful 2009, the Bermuda insurance and reinsurance markets are "pretty flush" with capital and seeking outlets for it, according to Susan Patschak, chief executive of Canopius Bermuda, at last week's Annual Bermuda Financial Services Conference in London.

The event was sponsored by Business Bermuda, whose membership is drawn from local and international organisations involved in financial services, insurance, reinsurance and legal and accounting services.

"Everybody came off a good 2009 year," Patschak told BestWeek Europe. "And I think people are looking for opportunities now to deploy that capital." Ms Patschak also appeared during a panel discussion of insurance/reinsurance and captives.

Richard Irvine, a US tax partner with PricewaterhouseCoopers in Bermuda, told the panel that Bermuda-based companies have built up their reserves and capital bases in recent years.

"When the earth does shake and the wind does blow, the market will be able to step up and perform," Mr. Irvine said. "And that is a principal advantage of the market."

Ms Patschak expects an increase in reserve levels over the next couple of years. She also noted expectations of continued mergers and acquisitions activity.

"There are companies out there that, when put with other companies, one plus one makes three, as opposed to just two," Ms Patschak said in the interview.

But she does not foresee an influx of new capital into Bermuda.

"We talk about the class of 2001 and the class of 2005," she told the audience. "If there was another big event, would we see a class of 2010? And I think the answer is no in Bermuda, the reason being that all of the resources we have on the island are pretty much used up."

Not only is there a lack of talent to accommodate a major expansion of the sector in Bermuda, Patschak said, but investors might be more attracted to sidecars, which allow for easier exits.

Bermuda's appeal lies in its status as a "true marketplace", with total 2009 gross written premiums of just more than $62 billion (46 billion euros). The physical dimensions of the market compare to those of London, Patschak said.

"We have about a mile radius of numbers of reinsurance companies," she said, with similar levels of expertise and access.

Bermuda is not a threat to London, Ms Patschak said, arguing the movement of Lloyd's interests into Bermuda and the acquisition of Lloyd's syndicates by Bermuda-based companies is "another way to kind of expand on the current companies that are either on the island or in London to support each other even further".

Ms Patschak, who is a regular visitor to London, described Canopius Bermuda as a "wholly owned subsidiary of the Lloyd's platform".

Ms Patschak, an American who lives in Bermuda, suggested the size and breadth of the Bermudian market, which is heavily focused on property/catastrophe cover, is not always understood from the outside. This, she added, is despite the fact that "people know there's a lot of us down there".

he panel agreed on the importance of the relationship between Bermuda and Lloyd's. Richard Lightowler, head of the KPMG insurance practice in Bermuda, described it as "long-standing", having been in existence for more than 20 years.

About a dozen Lloyd's syndicates are represented in Bermuda, Patschak said, and such high-profile Lloyd's operations as Hiscox and Catlin have moved their domiciles to Bermuda, where Canopius set up a cover holder. Mr. Irvine said "there's always a reason for concern" at the possibility of negative political perceptions toward Bermuda as an offshore jurisdiction from the United States. "Politicians speak generally in 20-second sound bites. They generally answer to their constituents."

Mr. Irvine cited the existence of a "coalition of US insurers who believe that Bermuda provides an unfair advantage to Bermuda-based companies over US-based companies". But he argued Bermuda has done well in presenting its case that its market benefits the US.

The current US government has "a big bill to pay", Ms Patschak said in the interview. "And so I think wherever they can find some additional revenues, they will look. I do think it's important to note that it's not just Bermuda under that microscope, and that if a tax bill were to happen, it's going to happen to all the offshore jurisdictions."

The full interview with Susan Patschak can be heard at http://www.ambest.com/media/media.asp?RC=170826