Figures from Guernsey's financial services regulator show that there were 766 international insurers licensed in the Island at the end of June 2013. This number comprises 241 limited companies, 70 Protected Cell Companies (PCCs), 428 PCC cells, 5 Incorporated Cell Companies (ICCs) and 22 ICC cells.

It compares to a total of 737 international insurers being licensed by the GFSC at the end of December 2012, which means there has been net growth of 29 entities during the first six months of the year. In that time, there have been 46 additions, including 3 limited companies, 2 PCCs, 37 PCC cells and 4 ICC cells. There have also been 17 surrenders, comprising 4 limited companies and 13 PCC cells.

Fiona Le Poidevin, Chief Executive of Guernsey Finance - the promotional agency for the Island's finance industry, said: "These figures show that the first half of this year has been very successful for Guernsey as an international insurance centre. The numbers are particularly impressive considering that they follow a very strong performance during the past couple of years. This continued growth during the first half of the year shows the ongoing attraction of Guernsey as a domicile that can provide solutions to meet a range of different risk management needs."

Nick Wild, Executive Chairman - Global (Ex-Americas) at JLT Insurance Management in Guernsey, said that during the first half of the year his firm has overseen the incorporation of the first insurance-licensed ICC entity in Guernsey with an Asian headquartered parent.

"The ICC structure appeals to Asian clients because enterprises are often owned by one family but with individual members responsible for different parts of the business. The ICC allows the group business risks to be under one umbrella but the separate assets and liabilities to be managed through individual cells which can become their own profit centres," he said.

"Guernsey's experience and expertise in establishing the cell company structures means it is ideally positioned to service this emerging market and in doing so, helps diversify the Island's business base which has been predominantly European and in particular, the UK."

Mr Wild added that his firm had also seen a flow of other inquiries, including corporate entities looking to engage in alternative forms of risk transfer, for example pension funds using transformer vehicles to manage longevity risk by passing this to a rated reinsurer.

Paul Sykes, Managing Director of Aon in Guernsey and the current Chairman of the Guernsey International Insurance Association (GIIA), said: "We have seen an uptick in Insurance Linked Securities (ILS) cells being launched. 1 January, 1 April and 1 June are notable dates in the reinsurance calendar for business being conducted and this June saw funds investing into catastrophe risks establishing a number of new cells to issue reinsurance contracts to the markets."

He said that this type of ILS business has been the driving force behind the recent increase in cells established in Guernsey and that this diversification from traditional captive insurance business adds to the Island's proposition as an international insurance centre and an ILS centre of excellence.

Miss Le Poidevin added: "These comments from local practitioners, coupled with the statistics from the GFSC, show that Guernsey remains attractive for traditional captive insurance but that we are also diversifying our service base, in terms of the type of risk management and the geographical origin of this business.

"Guernsey Finance is working with GIIA to help promote Guernsey as a centre for ILS in recognition of the fact that the Island is an emerging centre of excellence for this business. The cost efficiency of our structures and the speed to market which we offer mean that we compare very favourably with other domiciles. These factors, coupled with the on-Island collaboration between our experienced insurance and funds sectors, make Guernsey a logical choice for ILS and related business."

Further information from the GFSC shows that last year there was growth in gross assets, net worth and gross premiums in comparison with 2011. Gross assets rose from £21.76 billion to £22.90 billion, net worth increased from £8.97 billion to £9.43 billion and gross premiums rose marginally from £4.62 billion to £4.63 billion.

The GFSC said the sector had experienced growth of around 6% to 10% during last year. This is despite the fact that the full impact of the 97 new international insurers formed in 2012 is not taken into account in these statistics because the majority do not report their first financial results until 2013.

Guernsey was named European Captive Domicile of the Year when trade magazine Captive Review held its inaugural awards evening at the beginning of the year as part of its Captive Live conference and exhibition in London. In addition, research from Captive Review and Business Insurance,continues to show Guernsey as the largest captive insurance domicile in Europe and number four globally.

For more information about Guernsey's finance industry please visit www.guernseyfinance.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.