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.