Bermuda's Local Insurance Industry
The local or the domestic insurance market in Bermuda has been a thriving business since the late 1800s, although Bermuda has been known all over the world for its leading position in the international insurance and re-insurance business.
The local insurance industry in Bermuda has been serving not only the 66000 resident population of the island, but also the local businesses including the employees of the international companies that are based in the island. The domestic insurance business in Bermuda started in late 19th century with some British insurance companies opening up operations in Bermuda. Commercial Union and Royal Insurance companies were one of the first such companies in Bermuda.
The oldest insurance company in Bermuda was C.N.A. Butterfield & Son Ltd. setup in1850 and is still in existence. Today the largest of the local insurance companies in Bermuda are all long established. For example, Bermuda Fire & Marine (now BF&M) was set up in 1903, Somers Isle Insurance Company later became the prominent Argus Group was established in 1950, and Colonial Insurance was incorporated in 1958.
All these large companies employ hundreds of Bermuda resident staff, and mostly started their business providing coverage for local properties and marine insurance. Subsequently many other insurance companies and agencies such as Freisenbruch-Meyer, Kitson Insurance Services, and Lister Insurance Agency were formed.
Gradually the portfolio of services and products expanded. In 1943, the Motor Car Insurance Act was introduced in Bermuda which required every car owner to have a third party insurance. This opened up offerings from the insurance companies, and gradually offerings included home, cars, bikes, contents, boat, sports, travel and specialty insurance. Somers Isles Insurance Company first introduced health insurance in Bermuda
in Bermuda in 1950 and enjoyed a steady growth for 20 years.
However in 1970, the Health Insurance Act was passed in Bermuda requiring all employers to provide such insurance to their employees that cover public ward hospitalization at the Kings Edward VII Memorial Hospital.
This opened up huge competition and many insurance companies started to offer the health insurance to Bermudians.
Over the years, the local residents of Bermuda particularly the working class have enjoyed great insurance offerings in the island. However, a key concern in the recent time has been for the senior citizens who do not yet have any retiree insurance schemes.
The cost of insurance is growing at a much faster rate than the inflation. This is mainly due to increasing consumer expectations, aging population and expensive new medical technologies. Over 60% of the population of Bermuda are overweight or obese which in turn creates many ailments including heart disease, diabetes and others.
In 1998, the Government of Bermuda introduced National Pension Scheme Act that required the employers to contribute towards pension fund for Bermudian employees and appoint qualified pension administrator. This opened up another opportunity for the insurance companies in Bermuda.
It is anticipated that by 2030, 22% of the Bermuda population will be over 65 years of age. And they will require 70-90% of their pre-retirement earnings to maintain the lifestyle and standard of living.
Many of the local insurers in Bermuda provide insurance coverage to local businesses writing various risks including both employers’ and public liability. They can also place overseas coverage through Lloyd’s and other brokers, in case the products are not available on the Island.
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