Posted: 03/07/2012
The number of international insurance entities licensed in Guernsey has grown by 52 during the first five months of this year.
Figures from the Guernsey Financial Services Commission (GFSC) show that there were 739 international insurance entities licensed in the Island at the end of May 2012 compared to 687 at the end of December 2011. There have been 63 new licences issued and 11 surrenders, which represents net growth of 52 entities domiciled in the Island.
As at 31 May 2012, there were 344 international insurers, comprising 254 companies, 68 Protected Cell Companies (PCCs), 5 Incorporated Cell Companies (ICCs) and 17 ICC cells, as well as 395 PCC cells.
Fiona Le Poidevin (pictured), 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 and 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 2 July 2012, 45 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 Cayman (739), Vermont (590) and then Guernsey (343).
Miss Le Poidevin added: “It is encouraging that Captive Review shows Guernsey retaining its position as the leading captive domicile in Europe and number four globally. However, it is not particularly surprising given the figures we have seen coming through and it reflects the results of a similar report from Business Insurance earlier this year.
“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 (ILS) where Guernsey's experience and expertise across both the insurance and investment sectors make the Island an ideal home for such structures.”
In addition, in recent months, Guernsey Finance has again exhibited at both the annual conferences of the Association of Insurance and Risk Managers (Airmic) and the British Insurance Brokers Association (BIBA). There has been a strong local industry presence at these events with representatives from Alternative Risk Management (ARM), Barclays, Hepburns, Heritage, Marsh, Royal London Asset Management and Willis attending either with Guernsey Finance or independently.
Mike Johns from ARM and Mark Elliott from Heritage gave a presentation to a specific audience at BIBA interested in using cell captives to provide insurance for their clients of small and medium sized enterprises (SMEs). An introduction was provided by Miss Le Poidevin of Guernsey Finance, who had facilitated the speaking opportunity.
“Exhibiting at the Airmic conference ensures that we are in front of our traditional introducer market of risk managers from some of the largest corporations in the UK and attending the BIBA conference means that we are able to speak with brokers who have SME clients. It is important that we are promoting the different elements of our offering because while business from large UK companies has proved the lifeblood of our industry, it is also a very mature and saturated marketplace whereas the cell company concept means that captive insurance is now much more viable for SMEs and this is seen by the industry as an area for growth in the future,” said Miss Le Poidevin.