According to statistics Overseas insurers' affiliates ( mainly from Europe: Zurich, Allianz and Swiss ) write 14 percent of the home and business property insurance in the US Gulf and Atlantic Coast states, and 11 percent of home insurance and 40 percent of business property insurance in Florida.
Far from enjoying special tax advantages, foreign companies pay U.S. income tax on their U.S. subsidiaries and foreign income taxes on their foreign operations. If the foreign company is in Bermuda, it's paying a U.S. federal excise tax on gross premiums, not profits. While U.S. firms such as W.R. Berkley lead the market in profit performance.
If the US Congress imposes an additional tax on foreign overseas insurers and reinsurers as expected, insurance in the US, insurance will become scarcer and costlier. According to the Boston economic consulting firm the Brattle group Group of Boston, the tax increase would not only reduce the supply of reinsurance throughout the US by at least 20%, while hurricane prone Floridians would have to pay $500 million more in annual premiums,including an extra $66 million for home owners insurance.
To put it simply, reinsurance is back-up insurance. The entire US industry spreads its risk around the widest possible area through a Global network of foreign and domestic re-insurers. By taxing these companies excessively they will avoid doing business in the US and the costs for the "insurance safety net" will go up, directly affecting the consumers.
EU-Digest
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