Guernsey: 'Very Positive' Start To The Year For Guernsey’s Captive Insurance Sector

Last Updated: 23 March 2012
Article by Peter Niven

Most Read Contributor in Guernsey, September 2018

Guernsey's international insurance sector is experiencing a 'very positive' start to the year, according to Peter Niven, Chief Executive of Guernsey Finance – the promotional agency for the Island's finance industry.

Mr Niven highlighted a series of recent developments which together indicate the rude health of Guernsey's international insurance sector at the start of 2012.

He said that research shows Guernsey has strengthened its position as the largest captive insurance domicile in Europe, the Island has seen strong new business flows during the first two months of this year, another major piece of work is already in the pipeline and Guernsey's confidentiality regime for insurance supervision has been given the seal of approval from a major European body.

Mr Niven said: "Guernsey's international insurance sector finished last year very strongly and all the signs are that this has been maintained at the start of 2012. It is especially pleasing to see a newly licensed insurance manager in Guernsey and on top of that, further flows of business that put us within touching distance of having 700 international insurance entities based in the Island. I believe we will move past that mark in the coming months especially considering the new business which is already coming through the pipeline. For example, JLT in Guernsey has been heavily involved in the recently-launched, UK Government-backed NewBuy mortgage scheme. This is a major coup for Guernsey which, along with other successes, showcases the Island as a jurisdiction of choice for captives. Taken together, there are a number of developments which indicate that Guernsey's international insurance sector is very well placed for the future."

Newly published research from Business Insurance magazine shows that Guernsey has extended its position as the largest captive insurance domicile in Europe and remains number four globally. Based on information to the end of 2011 and published in the 5 March 2012 issue of the weekly magazine, the survey results put Bermuda as the largest captive insurance domicile globally, followed by Cayman, Vermont, Guernsey and then Barbados. Guernsey has the most number of captives in Europe, Luxembourg is placed second and then the Isle of Man and Dublin.

This was based on figures from the Guernsey Financial Services Commission (GFSC), which showed that Guernsey's international insurance sector saw a 50% rise in new business during 2011. Now, new figures from the GFSC show that further new business coming on board in the first two months of the year has taken total number of international insurance entities licensed in the Island from 687 at the end of December 2011 to 695 at the end of February 2012. In addition, during this time, Robus Risk Services (Guernsey) Limited has been licensed by the GFSC as a commercial insurance manager.

Last week, the UK Government, in conjunction with the Home Builders Federation (HBF) and the Council of Mortgage Lenders (CML), launched the NewBuy scheme which will offer prospective owners newly built homes with 95% mortgages underwritten by house builders and the Government. The JLT Group will manage and develop the scheme through a joint initiative of its operating companies, Lloyd and Partners Limited, JLT Specialty Limited and JLT Insurance Management (Guernsey) Limited.

Nick Wild Managing Director of JLT Insurance Management (Guernsey) Limited said: "We are delighted that JLT Guernsey have been able to play a key role in the success of NewBuy. We have assisted the HBF and the UK builders to establish a Protected Cell Insurance Company in Guernsey which will provide the insurance to the lenders under NewBuy as well as being the conduit for the Guarantee from HM Government. The insurance company will operate for a 10 year period and we will be employing additional staff locally to operate the vehicle. This is a very important development for JLT Guernsey and we are very proud of this appointment."

Carey Olsen in Guernsey were instructed by Addleshaw Goddard to provide Guernsey legal advice to CML in respect of the NewBuy Scheme. 

Konrad Friedlaender, who was assisted by Iain Atchison and Alison MacKrill, said: "We are delighted that, due to prior experience in advising on arrangements of this nature, Carey Olsen was selected to provide Guernsey law advice to the Council of Mortgage Lenders in establishing the NewBuy Guarantee Scheme which promises to help stimulate new-build housing supply in the English property market. The establishment of the Scheme in Guernsey further serves to illustrate the positive contribution that Guernsey can provide to other jurisdictions through our special legislative framework and the expertise found on the Island."

The GFSC has also announced that Guernsey's confidentiality regime for insurance supervision has been recognised by the European Insurance and Occupational Pensions Authority (EIOPA) as equivalent to that of the European Union. EIOPA is an EU body which integrates the relevant national supervisory authorities in the field of insurance and occupational pensions in each Member State.

Mr Niven added: "Guernsey is particularly attractive as a captive insurance domicile at the moment not just due to the experience, expertise and professionalism of our service providers but also because, at least in part, of our clarity in announcing that currently Guernsey is not seeking equivalence with the EU's proposed regulatory regime for insurance and reinsurance business, Solvency II. Indeed, we are continuing to adopt leading international standards but which also allow flexibility to best meet the needs of our distinctive client base."

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.

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