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Cayman Captive Insurance Market Grows

Thursday, November 3, 2011

The Cayman Islands Monetary Authority (CIMA) has reported a 93% increase in captive insurance company formations during the first nine months of 2011 compared to the same period in 2010.

Statistics published by the Authority show that a total of 29 captive insurance companies established operations in the Cayman Islands during 2011, up from 14 in the first three quarters of 2010. The increase, according to the Authority, “shows the continued resilience of Cayman's captive insurance sector”.

Total premiums breached records, amounting to USD9.6bn as at September 30, a 12% increase on that recorded at the end of 2010. Total assets have risen only marginally since the start of the year, to USD58.3bn.

CIMA’s Managing Director, Cindy Scotland, commented: “This 93% increase in captive formations and close to USD10bn in premiums are indicators of the health of our captive insurance industry, despite the generally soft international insurance market conditions. In all of 2010 there were 25 new captives formed, so for our 2011 numbers to already be at 29, and with new applications pending, we anticipate this calendar year to reflect significant growth in new captives.”

The total number of captive insurers registered in the Cayman Islands, as recorded on September 31, 2011 (729), is, however, down on the number reported at the end of 2010 (738). The Authority noted this was predominantly as a result of companies placed into liquidation but said that since the start of the year active company numbers have increased steadily.

The Cayman Islands has continued as the leading jurisdiction for health care captives. As at September 2011, health care was the primary line of business for 256 companies (35%). Workers’ compensation remained the second largest line of business with 157 companies (22%).

Of the captive licensees active as of September 30, 418 were pure captives (57%), 120 segregated portfolio companies (16%), 75 group captives (10%), 51 association captives (7%), 34 special purpose vehicles (5%), 31 open market insurers (4%) and one was classed as a rent-a-captive. The 120 segregated portfolio companies comprise a total of 634 active segregated portfolios.

The Cayman Islands captive insurance industry is composed mainly of companies insuring risks in North America. As of September 31, 2011, premiums originating from North America accounted for 84% of the Cayman market, followed by Europe at 3%, Caribbean and Latin America at 2%, and the remaining global market at 11%. In terms of captive numbers, North America accounts for 90% of the Cayman market, followed by the Caribbean and Latin America at 3%, Europe at 2%, and the remaining global market at 5%.