The number of international insurance entities based in Guernsey grew again during 2007 despite the Island's maturity in the sector and the difficult market conditions.
As part of this growth over the past twelve month's, the world's first local authority captive has been established in the Island, Guernsey's first major commercial reinsurer has been licensed and the Island's first insurance writing incorporated cells have come on-stream.
"The increase in the number of entities domiciled in the Island and the several new 'firsts' that we have seen during the past year illustrate that Guernsey's international insurance industry is continuing to perform robustly into 2008," said Peter Niven, Chief Executive of GuernseyFinance – the promotional agency for the Island's finance industry.
Figures from the Guernsey Financial Services Commission (GFSC) show that at the end of 2007 there were 298 traditional captives domiciled in Guernsey. In addition, between the end of 2006 and the end of 2007 the number of Protected Cell Companies (PCCs) grew from 68 to 69, PCC cells rose from 243 to 257, Incorporated Cell Companies (ICCs) remained at one and the first seven insurance writing incorporated cells were established – taking the total number of international insurance entities up to 632.
David Riley, Chairman of the Guernsey Insurance Companies Management Association (GICMA), said: "It is positive news that the number of licences in issue increased during last year despite there being a slowdown globally in the formation of new captive insurance companies given soft markets for many types of cover and Guernsey being a mature captive insurance market.
"In addition, Guernsey's international insurance sector now has an annual net premium income of more than £3.4bn. – double what it stood at ten years ago. This reflects the fact that as well as more captives being established, corporate parents are placing more business with existing captives and there is increased use of the cell company concept, which allows different companies to use the same captive and where the individual cells are often bigger than many traditional captives."
Guernsey remains Europe's leading captive insurance domicile and fourth in the world in terms of premium written.
During 2007 Guernsey played host to three more 'firsts': it became home to Gold Coast City Council Insurance Company Limited – the world's first local authority captive; Barbican Reinsurance Company Limited became the first major commercial reinsurer in the jurisdiction; and Guernsey's first insurance ICC, White Rock Insurance (Guernsey) ICC, established the first (seven) insurance writing incorporated cells in the Island.
Last year was the tenth anniversary of when the Island pioneered the cell company concept with the introduction of the PCC.
Mr Niven added: "Developments over the past year illustrate how Guernsey's international insurance industry is continuing its tradition of innovation and maintaining business growth by diversifying its range of products and services to match evolving client needs."
Statistics from the GFSC show that last year 40% of all licence applications were from UK parent companies (compared to 30% from Europe). Therefore while the UK still remains the largest single source, in percentage terms it is less significant than in the past as Guernsey's spread of business becomes more international.
In addition, the GFSC has said that the new entities are writing a diverse mix of business from simple deductible infill policies to major reinsurance.
This news comes as the Island is undertaking a specific promotional campaign to attract reinsurance business. As part of this Nick Wild, Executive Chairman (Ex Americas) of JLT Insurance Management, and Mark Helyar, Managing Partner of law firm Bedell Cristin, Guernsey, have recently published a capability statement entitled 'Guernsey: Where European Reinsurance and Capital Markets Converge.' Copies of this document are available on request from GuernseyFinance by emailing info@guernseyfinance.com or calling +44 (0) 1481 720071.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com
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