Deputy Managing Director of Bank of The Bahamas (BOB) Hubert Edwards said the captive insurance industry is a presently underutilized growth area for The Bahamas' financial services sector.

Edwards told Guardian Business yesterday that The Bahamas has lost a lot of business in the captive insurance to Bermuda and the Cayman Islands. These two countries are now leaders in the industry, he added.

"The Bahamas still has a foothold in there. If you think back a couple years ago, there was a deliberate effort made through the insurance regulators working with the government to start attracting captive insurance back to into the country," said Edwards.

Edwards explained that captive insurance is similar to "self-insurance" whereby a business can invest in a captive insurance policy to cover losses in the case of a potential lawsuit or malpractice.

"From a benefit point of view, it is beneficial to the organization in which the captive insurance is connected. They are able to invest their monies and provide a risk management mechanism in case it is needed," said Edwards.

He added that captive insurance is an additional line of business that can offer high-paying jobs and can open opportunities for entrepreneurs.

"If you have the connections and the contacts, you can start a business that manages captive insurance once you have the expertise," said Edwards.

According to Edwards, private and public sector relationships are important for the captive insurance industry to work in The Bahamas.

"It is an area for high-valued financial services," said Edwards.

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