Four years after announcing plans to set up a Class 3 reinsurance carrier in Bermuda, Accelerant has changed plans and moved its focus to the Cayman Islands instead.

On January 2 at the request of the company, the Bermuda Monetary Authority cancelled Accelerant’s respective Class 3B Insurer registration, granted the previous month.

Credit ratings agency AM Best has now withdrawn its ratings because the parent company “made the strategic decision to establish a licensed affiliate in Cayman to act as an internal reinsurer instead”.

The rating agency added: “At the time of the withdrawal, the outlook of the credit ratings was stable.”

In 2022, the agency assigned Accelerant Re (Bermuda) a financial strength rating of A- (Excellent), a long-term issuer credit rating of “a-” (Excellent) and an outlook of stable.

Their procedure is for a final rating opinion to be produced in conjunction with a rating withdrawal. However, a final rating opinion could not be produced for Accelerant Re Bermuda because of its cancelled insurance registration and the absence of insurance liabilities.

An insurance industry executive told The Royal Gazette confidentially that some Bermuda insurance companies were moving to Cayman because of Bermuda’s Corporate Income Tax Act bringing the island in line with the Organisation for Economic Co-operation and Development’s global minimum tax regime. This applies particularly to firms that did business only in the United States, where the same rules would not apply.

Our source indicated that the Cayman change would mean staff, including some Bermudians, would also make the move to the Caribbean island.

Bermuda’s Corporate Income Tax Act is scheduled to take effect next year and will charge 15 per cent on the profits of multinational enterprises with more than €750 million (about $808 million) of revenue annually.

Requests for comment from Accelerant were not answered by news time.