Guernsey: Guernsey’s Insurance Advantage

Last Updated: 20 September 2013
Article by Martin T. Le Pelley

Most Read Contributor in Guernsey, September 2016

Martin Le Pelley, Compliance Director at Heritage Group and former Chairman of the Guernsey International Insurance Association, looks at Guernsey's expertise across the global insurance sector.

Guernsey has had a thriving insurance industry for many years. One of the key strengths of the Guernsey insurance market is the experience and knowledge of the professionals in the industry, while the market is also remarkably diverse in terms of its participants. The island's position as the largest captive insurance domicile in Europe is well publicised, but the island is home to a number of niche commercial insurers, specialising in a wide variety of insurance, life insurance and reinsurance products.

One only has to look at the Guernsey Financial Services Commission website to see how diverse the insurance market is. There are a total of 752 'international' insurers in the island, made up of traditional insurance companies, Protected Cell Companies, Incorporated Cell Companies and their respected cells (each of which is an insurer in its own right). These international insurers are mostly managed companies, and there are 19 different insurance managers in Guernsey. Compare this to Gibraltar where there are eight licensed insurance managers, and it is easy to see the wide variety of service providers offering diversification and competition for the international insurance market. These insurance managers consist of the big four broker-managers (Aon, Marsh, Willis and JLT) as well as a number of independent insurance managers (Heritage, ARM, Kane, Hepburns, Robus, etc). The former are

able to provide a 'one stop shop' to their large clients with both broking and captive services under one roof, whilst the latter offer an independent management service for those clients who value the services of their captive manager free from any conflict arising from other services which the company or group provides.

The diversity and competitiveness of the Guernsey international insurance market is one of the reasons why the GFSC has recorded a steady increase in gross premiums written, gross assets and net worth over the last 10 years, with the latter increasing from £6 billion to over £9 billion. Also, the statistics reveal that the insurance market as a whole is remarkably resilient to the wider economic conditions in Europe. The island saw almost 100 new insurers licensed during 2012, and the overall solvency of the nonlife international insurance market is more than 200 times higher than the aggregate minimum capital requirement.

The Guernsey Advantage

There are certain key features of the Guernsey insurance market, which ensure that it remains competitive as an insurance domicile.

  • The diversity, experience and knowledge of the participants (as mentioned above).
  • The fact that the island is not within the European Union.
  • The advantageous legislative framework which the island has adopted for insurance.

The Diversity, Experience and Knowledge of the Market

In addition to the large number and variety of participants in the market, Guernsey also has a track record in innovation when it comes to insurance. The insurance regulator, the GFSC was one of the founding members of the International Association of Insurance Supervisors – which is the supranational body responsible for setting international insurance standards. The island was also the first to introduce Protected Cell Company legislation in 1997, which proved key to the opening up of the market to smaller participants and reducing the barriers to entry. The Guernsey PCC legislation has been copied by jurisdictions as diverse as Washington DC, Dubai and Malta, amongst others.

More recently the island has provided insurance solutions to both the social housing sector in the UK, and the UK homebuilding sector – both of which have faced difficulties for different reasons as a result of the recession. Also the island has seen a growth in 'alternative risk transfer' products such as Catastrophe Bonds and Industry Loss Warranties. One such bond has recently listed on the Channel Island Stock Exchange (thus proving that the insurance sector in Guernsey is well integrated with the other finance sectors in the island).

The expertise in the insurance industry extends to the accounting firms, the legal firms, the actuarial firms, the banks and investment managers and the many other service providers who are active in supporting the development of the market. This market development is due to receive a boost soon from the Guernsey International Insurance Association which has just formed a Market Development Committee to explore the opportunities for Guernsey in the ever-changing international insurance marketplace.

This depth and breadth of experience is hard to find in other captive insurance domiciles. Apart from Bermuda, which has spearheaded the development of international insurance and reinsurance, no other domicile has the same degree of talent available in one place.

The Non-EU Status of Guernsey

As I write this, the UK government is in a quandary about its EU membership with a number of senior Government figures suggesting that they would vote for an exit, and the UK Independence Party achieving its greatest ever success in the recent local elections. Such Eurosceptism is well understood by Guernsey, which has never been an EU member. A smaller economy can react faster to economic change and take advantage of opportunities presented by the changing social and political landscape compared to a large economy (such as the EU) which is weighed down by the slow pace of change in a market plagued with political wrangling, recession and financial mismanagement by its member states.

Guernsey's insurance regulations, for instance, are fully compliant with international best practice, as defined by the International Association of Insurance Supervisors, but Guernsey is free to apply these high level codes in a way which best fits the insurers licensed in Guernsey so as to enable the insurers to remain competitive in comparison to their EU counterparts. Guernsey was invited to become 'equivalent' to the EU's yet-to-be implemented new insurance regulatory regime called 'Solvency II', however the island's decision-makers decided against this offer, on the grounds that the EU regulations may (or may not) be appropriate for EU licensed insurers, but did not seem to be appropriate for the niche specialist insurers in Guernsey. As Guernsey is outside of the EU it has the freedom to take this decision – a decision which Gibraltar and Malta do not have the freedom to take – thus giving the island a competitive advantage.

Opting out of EU regulation may be seen by some as Guernsey taking the 'easy option' or applying a 'lighter touch' regulatory regime. The solvency levels within Guernsey insurers, as detailed above, should prove that the insurers located in Guernsey are less risky than their European counterparts, not more so, and the lower risk profile of these insurers is the very reason why applying a regulatory regime designed for higher-risk insurers would have been overly burdensome for the island's insurers ('a sledgehammer to crack a nut'). Rather, the GFSC have accepted

the more challenging but ultimately more rewarding task of creating a bespoke regulatory regime, which continues to meet all the current international standards and effectively manages the regulatory risk of its insurance market but which will give the island's insurers a competitive advantage compared to those insurers in the EU who find themselves weighed down by regulations designed for larger, more risky insurance entities.

The Advantageous Legislative Framework

Alongside the bespoke insurance regulatory laws sits a range of other legislation, such as the Companies (Guernsey) Law 2008 – a modern company law, which consolidates and updates the Protected Cell Company law, the Migration and Conversion laws, the Insolvency laws and a host of other corporate law to ensure that Guernsey companies can adapt quickly and efficiently to changing opportunities.

For example, at Heritage we have assisted a group with converting two captives into Protected Cell Companies and then amalgamating them, so as to bring all their insurance business into one legal entity with two cells. This was easily achieved using the provisions of the Company Law and a very user-friendly Company Registry, with its state of the art on-line reporting facilities.

In addition to the Company Law, the island's Zero-ten Corporate Tax regime, which has been approved by the EU Code of Conduct Group, is both tax efficient and simple to understand for insurers.

Coupled with a growing number of double tax agreements, the corporate tax position for Guernsey insurers is favourable. Furthermore, the new Controlled Foreign Company rules issued by the UK Treasury are also beneficial for UK-based international companies with Guernsey captives, as the UK tax liability for such companies is limited to the profits arising on UK insurance risks, rather than the overall profits of the company, with an exemption below £500k of profits. Finally, Guernsey has adopted all of the Financial Action Task Force recommendations in relation to anti-money laundering (AML), and it is therefore regarded as an 'equivalent' jurisdiction in relation to AML with the EU and other developed world economies, such as the USA, Canada, Australia and others. Most recently the regulator in Guernsey has softened the requirements for general insurance to recognise the low-risk nature of this type of insurance in relation to money laundering and financial crime. This means that Guernsey insurers can compete on an equal footing with other European domiciles in relation to AML compliance.

Conclusion Guernsey's enviable position as an insurance domicile has been hard earned, and the result of the industry (as represented by the Guernsey International Insurance Association), the politicians (in particular the Commerce and Employment Department) and the regulator (the Guernsey Financial Services Commission) all working together to identify and facilitate the creation of new products and services. This isn't just down to innovation, it requires legislative and political intervention at the highest levels to ensure that the market continues to provide the most attractive location for niche, specialist insurance start-ups in Europe, and possibly the world.

Originally published by IFC Review, August 2013.

For more information about Guernsey's finance industry please visit

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

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

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.