The automotive industry took the top spot for new formations by industry of parent company in Bermuda in 2017, according to the BMA's 2018 Captive Report.
The report highlighted results from statutory financial returns submitted through the BMA’s electronic statutory financial return system as of 31 October 2018. The new system officially launched in April 2016 for financial year-end returns for 31 December 2016 onwards.
The report showed that 50 percent of new formations by industry of parent company come from the automotive industry, while 25 percent come from financial institutions. In addition, 13 percent come from education and 12 percent from the energy, power and utility sector.
Although the automotive industry led new formations by industry of parent company, financial institutions continue to be the most significant industry of parent companies.
Following from financial institutions was the shipping, transport and storage industry with 12 percent, automotive, manufacturing and retail and 11 percent, and healthcare at 10 percent. All other industries represented under 10 percent.
In the report, it stated: “Bermuda continues to be home to a broad range of industries utilising
captives as a key risk management tool.”
In terms of geography of risk assumption, North America and Bermuda continue to hold the top spot with 67 percent. Europe falls in second place with 21 percent of risk assumption, while Japan sits third with 4 percent.
Central and South America, the Caribbean and the rest of Asia sat at 3 percent, Africa and the Middle East sat at 2 percent and Australia and New Zealand just 1 percent.
The report stated: “In 2017, as in the prior year, the majority of risk assumed by Bermuda captives originated in North America and Bermuda—69 percent—and Europe—19 percent. This is unsurprising considering 75 percent of captives have a parent in these domiciles. The Authority observed an increase in business written from the US and a reduction in EU business in 2017 as compared to 2016.”
Pure captives continue to dominate as the most popular captive structure and saw an increase of 4 percent for 2017.
Pure captives were also the only captive type to be formed in 2017, compared to 2016 when association captives are ‘other’ types of captives were created.
