Guernsey Cements Insurance Sector Dominance
Thursday, July 5, 2012
New figures published by the Guernsey Financial Services Commission (GFSC) show that
the number of international insurance entities licensed in Guernsey has risen
substantially during the first half of the year.
During the first five months of the year, the GFSC
granted 63 new insurance industry licenses, with 11 licenses surrendered. This brings
the number of international insurance entities present in the island to 739,
as at the end of May 2012, compared with 687 in December 2011.
On May 31, 2012, there were 344 international insurers, comprising of 254 companies,
68 Protected Cell Companies (PCCs), five Incorporated Cell Companies (ICC),
17 ICC cells, and 395 PCC cells.
Welcoming the marked expansion of the territory's insurance industry, Fiona
Le Poidevin, Chief Executive of Guernsey Finance, the promotional agency for
the island’s finance industry, said: “Figures from the GFSC showed that the
number of new licences being issued really accelerated as we moved through last
year and I am delighted to see that this trend has continued during the early
months of 2012."
“We are seeing new licences issued across the different types of structures
available but there has been especially strong growth in the number of cell
companies being formed. A significant proportion of these relate to a PCC managed
by JLT on behalf of the NewBuy scheme, where there are even more licence
applications in the pipeline, but we are also hearing from the industry that
there are a number of other opportunities coming through as well.”
JLT Insurance Management in Guernsey reports that, as at July 2, 2012, 45 new cells
had been licensed in relation to a PCC it has established as part of the UK’s
NewBuy scheme. The NewBuy scheme was launched in March by the UK government,
in conjunction with the Home Builders Federation (HBF) and the Council of Mortgage
Lenders (CML), to offer prospective home owners newly built properties with
95% mortgages underwritten by house builders and the UK government. The HBF
PCC in Guernsey provides the insurance to the lenders under NewBuy as well as
being the conduit for the guarantee from the UK government.
Nick Wild, Managing Director of JLT Insurance Management (Guernsey) Limited,
said: “We are delighted that JLT in Guernsey has been able to play a key role
in the launch of the NewBuy scheme. We have broken new ground with many aspects
in the design of this insurance coverage and the PCC structure. Guernsey PCC
legislation has once again proved its flexibility and the GFSC has done a great
job processing the large number of cell applications."
“It is very pleasing to have 45 cells already licensed, there are more applications
being processed and we expect to have more being submitted to the regulator
in due course as well. As HBF PCC is a central part of such an innovative scheme,
this is a significant endorsement of both JLT as a manager and also Guernsey
as a domicile.”
These developments come as a new report from trade publication Captive Review
shows that Guernsey has retained its position as the largest captive insurance
domicile in Europe and number four globally. The July issue of the magazine
includes a survey of captive domiciles based on figures to the end of 2011 and
excluding individual PCC cells (on the basis that these are not distinct legal
entities from the PCC core).
It reveals that there are more captives domiciled in Guernsey (343) than any
other jurisdiction in Europe, followed by Luxembourg (242), the Isle of Man
(132) and then Ireland (101). Globally, the largest captive domicile is Bermuda
(862), followed by the Cayman Islands (739), Vermont (590) and then Guernsey (343).
Le Poidevin added: “What is even more impressive is that our position is supported
by strong assets under management and premiums written within these structures. Our performance in the last year has been superior to many of the other domiciles
and of course, this survey does not include individual PCC cells, which are
a strength of ours since we pioneered the concept in 1997."
“Indeed, what I am hearing from industry is that there is a real focus on making
use of the structure to provide some innovative solutions, for example in the
form of Insurance-Linked Securities where Guernsey’s experience and expertise
across both the insurance and investment sectors make the island an ideal home
for such structures.”
In recent months, Guernsey Finance has again exhibited at both
the annual conferences of the Association of Insurance and Risk Managers and
the British Insurance Brokers Association. There has been a strong local industry
presence at these events with representatives from Alternative Risk Management,
Barclays, Hepburns, Heritage, Marsh, Royal London Asset Management and Willis
attending either with Guernsey Finance or independently.