Bermuda’s captive insurance industry will have to keep a close eye on international tax rules, an expert said yesterday.

Richard Irvine, tax leader at professional services firm PwC, said: “Captives in Bermuda will need to continue to monitor the ever-changing global tax landscape, particularly with the proposed tax changes currently being considered in the US federal and state tax systems and Organisation for Economic Cooperation and Development’s initiative around base erosion and profit shifting.”

Mr Irvine was speaking after the recent Bermuda Captive Conference, partly sponsored by PwC, and which attracted a record number of delegates.

PwC director of assurance Stewart Ritchie said: “There are more than 800 active captives in Bermuda and there’s a huge service organisation that goes along with this, supporting many jobs on the Island.”

And he added that Bermuda’s position as the world’s largest captive insurance domicile had led to the creation of a major insurance and reinsurance sector as well.

The conference heard that booming economies in Latin America offered new markets, as did Canada.

The industry is also seeing an increased focus on the use of captives to cover employee benefits and computer crime.

PwC captive insurance leader David Gibbons said: “We all saw extensive interest from new market participants from Latin America and Canada where concern over risk management and mitigation benefits offered by a Bermuda captive fits well into their global structure and philosophy.

“We also saw existing captives looking for new ways to utilise the capital and connections in the reinsurance market they had built over the years to write new lines of business, specifically employee benefits and cyber risk.”

He added: “Latin America is an expanding market that is increasingly driving more business to the Island. As Latin American countries experience significant economic growth, many companies are expanding beyond their home borders, creating what are known as multi-Latinas.

“These companies are exploring ways to manage their expanding exposure to risk. One of the most effective ways they are managing their risk is through the use of captive insurers.”