Guernsey: Guernsey Captive Popularity Reflected In New Barclays Hire

Last Updated: 2 April 2013
Most Read Contributor in Guernsey, September 2018

Colleen McHugh, who recently joined Barclays in Guernsey, talks about what her team can do for captives in Europe.

What is your background?

I have 13 years' investment industry and financial services experience. Nine years of this was spent working in Bermuda as an investment specialist within the asset management and private bank area. I've worked closely with high-net worth individuals, trusts and international business corporations. My final years in Bermuda saw me working for HSBC Asset Management. In this role, I worked closely with the captive, insurance and re-insurance sector in Bermuda. I am a qualified financial advisor registered with the Chartered Insurance Institute, and an experienced securities trader with NASD Series 7 and UK Registered Representative qualifications. I also hold an MBA from the University of London.

What will you bring from your previous roles to Barclays?

I have comprehensive experience across different sectors and environments with particular experience in international financial centres. As a result, I am familiar with the challenges faced by clients and I am able to quickly provide the solutions they need. Over the years I have learned that listening to my clients and truly understanding their business is crucial. My experience and knowledge gained from working with Bermuda captives will solidify the existing expertise of the Barclays captive team and allow us to deliver key solutions to the market.

What are captives in Guernsey investing in and why?

Being new to the island, this is something I am getting up to speed with very quickly. The first and primary purpose of a captive is to act as an insurance vehicle to meet its claims responsibilities. Traditionally in Guernsey, like many captive jurisdictions, cash has been king. However, as low interest rates prevail, bank deposit rates are constantly falling. In the past, the yield on cash deposits alone was often sufficient to cover the operating costs of a captive, and therefore they were self-funding. The interest rate environment is very different today. Consequently captives are actively searching for yield while trying to minimise risk. They are beginning to embrace the need to segment their cash reserves into the different classifications of operating, core and strategic.

Operating and core cash needs to be liquid, whereas strategic cash can be used to invest in longer-dated securities to maximise yield pickup while minimising volatility. Therefore, short term fixed income investments should always be part of a core investment strategy within the captive world, given the strong need to protect and preserve capital.

The current mantra continues to be 'return of capital' as opposed to 'return on capital'. Few investments fit this category better than a diversified portfolio of short-dated bonds. This short duration fixed income strategy has proved very successful for captives in other jurisdictions, and I can see it being replicated here as long as interest rates remain depressed.

How important is an investment management programme to captives – is it a luxury or something more?

In life, for many, when everything is going our way we become more confident in our own abilities and don't feel the need to engage professionals. Investment management is no different. Prior to 2008, captives could achieve 5 percent plus on 12-month fixed deposits, so there wasn't a great need to look at alternatives to cash. This is no longer the case and a quality conservative investment management programme is a necessity for captives. The prevailing low interest rate environment has encouraged captives to become much more engaged with their investment advisors as together they seek the best solutions from a risk and return basis. Captives should use these relationships that they have developed with their trusted investment advisors to help them navigate the challenging waters. A partnership approach will allow captives to become better informed of their investment options, to understand where risks are heightened, and discover how asset allocation and diversification can add to investment returns while minimising volatility.

How do the needs of Bermuda captives differ to Guernsey ones?

No matter where a captive is domiciled, they essentially have the same function, ie, to act as an insurance vehicle to meet their claims responsibilities. Consequently, many of their primary needs, such as banking requirements, credit and investment services, are the same if they are domiciled in any jurisdiction. One difference between captives in Bermuda and Guernsey is that most Bermuda-domiciled captives have US parents, whereas Guernsey captives have UK and European parents. This alone creates a difference in certain preferences. Trusts (REG 114) for instance are a much more utilised vehicle in Bermuda. In contrast, Guernsey is only now warming to the trust structure as recently launched by the Barclays captive team in 2012.

In addition, you could argue that the psychological makeup of US-owned captives are different to their European counterparts in that historically they are more inclined towards the idea of investing their surplus assets in something other than cash.

What will you and your colleagues in the Guernsey office be doing for captives in Europe?

Barclays recognises Guernsey's significance within the global captive industry. With this recognition, Barclays is committed to offering a full and complete European solution hosted and led from the Guernsey office. Recognition of certain cross-border considerations will have some limitations on this but the offering from Guernsey has been significantly bolstered over the past few years. Within the office in Guernsey, we have a head of captives business, a relationship team and dedicated support and credit writing capability. This, when twinned with local Barclays trustee and wealth advisory businesses, means that from start to finish we can field enquiries arriving from local and overseas territories and puts us in a prime position to support the wider Barclays effort in Europe. There has been considerable up-skilling of support functions taking place locally to develop a detailed and comprehensive appreciation for the intricacies of the demands of the sector.

We have resident risk, account opening and payment support teams who all have working knowledge of the sector and European territories operating in the captive industry. Training is a growing demand with the introduction of new sector concerns including Solvency II, but with a rolling, detailed, training plan in place we are well placed to accommodate these. From the Guernsey office, we can offer the full breadth of Barclays products, including banking services, letters of credit, liabilities solutions and security trust agreements.

More recently, we have started to look at specific and tailored enquiries for risk purpose trusts and commodities hedging for captives, all hosted out of Guernsey and it is our team's expertise that has enabled us to respond rapidly to new enquiries.

Barclays recently hired Simon Phillips as head of captive insurance, based in Jersey. Is Barclays planning any more expansions in the captive industry?

We are keen to ensure that we continue to provide a high level of service to our existing clients as well as expanding our client base to include new captives. We have recruited, and will continue to recruit, a team of industry experts who have real insight and experience of the captive sector, in addition to their knowledge on banking, trust and investments. It is not enough to have experts in one jurisdiction – Barclays offers a wealth of expertise in a number of key jurisdictions including Guernsey, the Isle of Man, Gibraltar, Malta, Bermuda, the Caribbean and onshore US, which are all key areas for captive work. We are expanding the team – in terms of both number and geography – to cement our position as a world-leading partner that offers services to captives and provides a level of understanding that means we can act as a consultative partner as well as a provider of the core services that captives need. Our ambition is to be seen as the go-to bank in the captive sector.

Originally published by Captive Insurance Times, March 2013

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions