Posted: 23/10/2012
The Guernsey Financial Services Commission (GFSC) has licensed 107 new international insurers in the last 12 months.
Figures from the Island's financial services regulator show that there were 746 international insurers licensed in the Island at the end of September 2012 compared to 682 at the end of September 2011.
In that time, there have been 107 additions, including 5 ‘pure' captives, 7 Protected Cell Companies (PCCs), 90 PCC cells, 1 Incorporated Cell Company (ICC) and 4 ICC cells. There have also been 43 surrenders, comprising 14 ‘pure' captives, 7 PCCs and 22 PCC cells. This means there has been net growth of 64 entities over the year.
There has also been net growth of 59 since the end of December 2011, when there were 687 international insurers licensed in Guernsey. The 746 entities domiciled in Guernsey at the end of September 2012, comprised 251 ‘pure' captives, 67 PCCs, 406 PCC cells, 5 ICCs and 17 ICC cells.
Fiona Le Poidevin, Chief Executive of Guernsey Finance – the promotional agency for the Island's finance industry, said: “The figures show that the number of new licences being issued picked up as we moved through last year and that trend has continued during the first three quarters of 2012. Indeed, having more than 100 new licenses issued during the last twelve months shows that Guernsey very much remains a domicile of choice for international insurance entities. Clients choose to do business here because we offer a mix of high standards of service combined with proportional regulation which is very difficult to find in any jurisdiction globally.”
Independent research carried out by trade publications Business Insurance (March 2012) and Captive Review (July 2012) placed Guernsey as the largest captive insurance domicile in Europe and number four in the world.
Miss Le Poidevin added: “We are seeing new licences issued across the different types of structures available but there has been especially strong growth in the number of PCC cells being formed. The PCC is a particularly popular vehicle at the moment and the fact that it was pioneered in Guernsey means that we have the experience and expertise in using the structure to best meet client needs, which is reflected in the continued growth of this business stream.”
A significant proportion of the growth in PCC cells relates to two PCCs managed by JLT.
In March, the UK Government-backed NewBuy scheme was launched by the UK's Home Builders Federation (HBF) and the Council of Mortgage Lenders (CML) to offer 95% loan to value mortgages on new homes. The JLT Group is managing the insurance scheme for the initiative through its operating companies including JLT Insurance Management (Guernsey) Limited which is running the captive insurance company established for HBF.
Nick Wild, Managing Director of JLT Insurance Management in Guernsey, is reporting that HBF PCC now has 50 related cells. His firm is also managing the equivalent scheme for Scotland, backed by a Scottish Government Guarantee, called MI New Home. Launched on 12 September, MI New Home Insurance PCC already has six cells, with the expectation of more being licensed by the end of 2012.
At the end of November, the Guernsey parliament will debate a series of amendments to the Companies (Guernsey) Law, 2008, including making it possible in future for the conversion of a PCC cell to a standalone company.
The GFSC has also published new data which shows the gross assets, net worth and premium written annually in the Guernsey international insurance industry were all at higher levels in 2011 compared to 2010. Gross assets grew by 1.6% to reach £21.76 billion (US$34.86 billion), net worth grew by 6% to reach £8.97 billion (US$18.37) and premium written annually was up 12.7% to reach £4.62 billion (US$7.40 billion).
The last month has also seen Guernsey-based insurance manager, Robus, and fiduciary, Marlborough Trust, combine to offer the innovative trust-based insurance product, the Risk Purpose Trust.
In November, Guernsey Finance is exhibiting at two insurance conferences. The promotional body is exhibiting at the one-day event, Broker Expo, in Coventry on Wednesday 8th November where industry representatives will be Brendan Reeves (ARM), Paul Eaton (Heritage Insurance Management) and Stephen Casey (Marsh). A team including Chris Taylor (Lloyds TSB), Martin Le Pelley (Heritage) and Paul Sykes (Aon) is travelling to Luxembourg to attend the European Captive Forum on Tuesday 13th and Wednesday 14th November, where a number of Guernsey-based practitioners will be speaking at the event.
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