More significant business is expected to be established in Guernsey this year in the Island's thriving insurance sector, according to Peter Child, Chairman of the Guernsey International Insurance Association (GIIA).
Following the announcement of 45 new insurance licences issued in Guernsey in the first six months of the year, Mr Child told the Guernsey Press that he expected to see more reinsurance and pension longevity business coming the Island's way before the end of the year. Both sectors saw significant developments in 2014 and have been a focus for the Island's captive insurance industry.
Mr Child said he expected to see the establishment of one or two new reinsurance companies – a niche where the business actually establishes a physical presence in Guernsey, although the number of people employed would be low – and more pension longevity deals agreed in the rest of 2015.
Mr Child said market development was a real focus for GIIA and it is hosting a London event for the reinsurance sector next month. This follows three events in London and Switzerland held over the past year or so promoting the burgeoning Insurance Linked Securities (ILS) sector.
All three sectors are niche elements of the captive insurance industry, which Mr Child described as the 'bedrock' of Guernsey's insurance sector, the smallest but certainly an innovative leg of the Island's four-pronged finance industry.
"We differentiate ourselves with smaller niche bits of work. Our challenge in market development and selling is there are different markets for different sectors, so you need to be very specific," said Mr Child
Mr Child said the licence statistics revealed by the Guernsey Financial Services Commission – 45 news licenses issued and a net increase of 19 for the industry, taking the total number of insurers above 800 – was positive and 'better than expected'.
"But the number of licences can hide the true picture of the business, the numbers are potentially distracting when it comes to value. One protected call company may have as much value as 50 cells, for example."
The sector had seen an influx of non-traditional business, including cells for property and legal expenses insurance, he said, but the majority of the new business recorded would be ILS, with Guernsey particularly seeing a trend of European companies with ILS structures in Bermuda moving that business back into Europe and to Guernsey, the number one European jurisdiction for captives.
"ILS is still going from strength to strength. It is being seen as part of an investor's balanced portfolio now and is certainly here to stay."
Local figures in the industry were responsible for much of the influx of new business, he said, rather than relying on a flow of business from international parent companies.
"The majority of the growth we're seeing is as a result of Guernsey individuals going out and getting business themselves and bringing it back to Guernsey."
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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