After revealing plans to establish a Class 3 reinsurance carrier in Bermuda four years ago, Accelerant has opted to shift its focus to the Cayman Islands, as reported by The Royal Gazette.
In early January, the Bermuda Monetary Authority cancelled Accelerant’s Class 3B Insurer registration at the company’s request. The report indicates that the parent company has decided to establish the operation in the Cayman Islands instead.
As a result of this change, credit ratings agency AM Best withdrew its ratings for Accelerant Re Bermuda, citing the parent company’s “strategic decision to establish a licensed affiliate in Cayman to act as an internal reinsurer.” AM Best noted that, “At the time of the withdrawal, the outlook of the credit ratings was stable.”
In 2022, AM Best assigned Accelerant Re (Bermuda) a financial strength rating of A- (Excellent), a long-term issuer credit rating of “a-” (Excellent), and a stable outlook.
The report mentioned that a final rating couldn’t be produced for Accelerant Re due to the cancellation of its insurance registration and the absence of insurance liabilities.
An executive in the insurance industry informed The Royal Gazette that some insurance companies in Bermuda are relocating to the Cayman Islands due to Bermuda’s Corporate Income Tax Act. This new law aligns the island with the Organisation for Economic Co-operation and Development’s global minimum tax regime. According to the report, this applies to firms conducting business solely in the US, where the same rules would not apply.
The company’s decision to move to the Cayman Islands implies that staff, including some Bermudians, will be relocating there.