For the Bermuda reinsurance market 2006 is likely to be seen as a vintage year when compared to the events of 2005 which saw many of the market's leading players receive life threatening losses from the 2005 hurricanes. The wave of new start-ups in 2005/6 received a mixed press even though, as predicted by Mr Aigrain, many of the new starts (as well as the recapitalised established players) did indeed "make money like bandits". However, for some, the absence of any major cats was not entirely good news as it meant that even bad underwriters saw good returns and rates are now likely to come under pressure in the New Year.

More recently Bermuda's ruling party, the Progressive Labour Party, elected to replace Mr Alex Scott as their leader and so Dr Ewart Brown is the country's new Prime Minister. The international business community will no doubt be interested to know Dr Brown's strategy for managing Bermuda's economy.

The New Year will be greeted with some trepidation for a number of expats on the island. The New Year will be the first time the so called "six year rule" comes into effect whereby any expat that has been on the island for more than six years and not benefiting from an exemption will be required to leave. This policy only came into force in 2001 and so 2007 will be the first time that the policy will be applied. Whether the new policy will result in a forced exodus from the island remains to be seen.

This Viewpoint item appeared in issue 111 of JTW News - December - January 2006

Author: Mike Morrison - KPMG Financial Advisory Services Ltd