Fiona Le Poidevin, Chief Executive of Guernsey Finance,
explores the reach of Guernsey's captive insurance
Technological advancement means that the world is feeling ever
smaller and this provides the basis for business to be conducted on
a truly global scale.
It is a trend which has been given a further boost by the fact
that while the developed part of the globe has seen an economic
downturn the 'emerging' markets have continued to be
drivers of increased private and corporate wealth.
Financial services firms from the UK, US and Europe are now
looking at how they can provide an offering which meets the needs
of these clients.
Guernsey has a broad based financial services industry which has
four key pillars: banking; wealth management; investment funds; and
risk management. The Island provides a wide range of risk
management services but it is particularly renowned for captive
Guernsey's first captive insurance company was established
in 1922 and this heritage has helped the Island grow significant
experience and expertise. Today, the Island is the largest captive
insurance domicile in Europe and number four in the world.
Our client base includes some 40% of the FTSE 100 companies
which have a captive. The UK is a major source of business although
traditionally Guernsey has also attracted captives from parent
companies based around Europe. However, international insurance
business in Guernsey is increasingly coming from much further
afield. Indeed, Guernsey already plays host to captives from parent
firms based in the Middle East (e.g. Saudi Arabia), Africa (e.g.
South Africa), Latin America (e.g. Colombia) and Asia (e.g.
Yet, while some of the emerging economies are sufficiently
sophisticated and open enough to allow risks to be written
internationally, others represent more long-term opportunities. It
is likely that significant work will need to be undertaken with
businesses in those jurisdictions and their domestic authorities to
unlock the potential of providing captive insurance services to
Guernsey is already busy in several of these centres, with China
being just one example. We have spoken with the Chinese regulator
about how we could help them develop specific domestic captive
legislation. In doing so, theoretically we will be helping to
create a barrier to entry for the traditional captive
However, what we envisage is that Chinese firms will insure
their local risks in a domestic captive but then once they have
become more comfortable with the concept, as they expand
internationally and as they understand the need to manage risk
effectively, then it would make sense to establish a vehicle in
Guernsey to cover their global risk base (ex-Asia).
This would be similar to the way large US multinationals often
have a captive on that side of the Atlantic for their US risks and
another in Europe for their rest-of-world risks.
The emerging markets represent significant potential to grow
captive business but some are more short term while other are more
long term opportunities. Guernsey is ensuring that it is well
placed in these markets so that it can serve as a domicile for
captives no matter whether the parents are based near or far.
Since the PRIIPs Regulation was published on 9 December 2014, the concept of a multi-option product has been one of the most discussed topics among the manufacturers of insurance-based investment products.
Directors & Officers Insurance (D&O) is a relatively new
branch of insurance in the United Arab Emirates (UAE) market.
Accordingly, issues such as allocation of costs have not yet been
considered by UAE or Dubai International Financial Centre (DIFC)
The MFSA issued a consultation document proposing the introduction of external auditing requirements for certain quantitative reporting templates that will form part of the Solvency Financial Condition Report.
From August 12 2016 when the UK's Insurance Act 2015 takes effect there will be differences affecting business (ie non-consumer) policies issued in Isle of Man and those issued in UK, including renewals.
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