Stockwatch

The week's winners
Cox up 6.5%
Wellington up 2.7%

The week's losers
Royal & SunAlliance down 6.8%
Zurich Financial Services down 6.5%

Going anywhere nice this year? Thought about Bermuda?

Dennis Kozlowski did. He's the chief executive - oops, ex-chief executive - of the deeply troubled US conglomerate Tyco International.

He has been charged with evading tax on an art collection. Tyco has been accused of dodgy accounting and its shares have lost 40% of their value.

And Tyco is based in Bermuda.

The worry is that the sunshine paradise will be tainted by association with Tyco.

In the current post-Enron paranoia, the merest whiff of a scandal is enough to send people - and they are often customers - scurrying in the other direction.

Tyco has specifically come in for criticism that it domiciled itself in Bermuda simply to minimise its tax bill in the US.

Of course, Bermuda has long been favoured by hard working insurance types.

They needed a low-tax environment in which to do international business and in return, the territory needed businesses wielding financial clout.

Both sides found what they were looking for and both were happy.

Bermuda has served insurance well and continues to do so - as the markets were rocked by last year's terrorist losses, more than $10bn (£6.8bn) flowed into the island's coffers.

The insurance sector contributes a healthy amount to Bermuda's economy.

The island charges no income tax and no company tax.

Its undoubted attractiveness as a place to write insurance was enough to tempt Goshawk to base its reinsurance subsidiary there when it was launched earlier this year.

By contrast, Wellington chose to park its new reinsurance venture in London.

Chief executive Julian Avery's argument now looks particularly prescient.

"It's all very well to have capital," he said, "but you have to be in a place where business reaches you."

Reports are already suggesting that the fall-out from the Enron and Andersen scandals has prompted greater use of in-house auditors.

So it's not too far-fetched to imagine clients attaching lower status to insurance cover written in Bermuda.

Investors, place your bets now.