The Guernsey Financial Services Commission (GFSC) licensed 85
new international insurers during 2014.
This included eight limited companies, three Protected Cell
Companies (PCCs), 54 PCC cells, five Incorporated Cell Companies
(ICCs) and 15 ICC cells.
Further data on the 85 licensed entities shows that their
owners' originate from a range of locations, including the UK
(35%), Cayman Islands (29%) and Ireland (13%)*, while the range of
business written over the 12 months to 31 December 2014 includes
Insurance Linked Securities (ILS) (45%) and insurance lines
covering property (13%), life/health (8%), and After the Event
(ATE) legal expense (7%).
Dominic Wheatley, Chief Executive of Guernsey Finance - the
promotional agency for the Island's finance industry, said:
"These figures show that last year was very successful for
Guernsey as an international insurance centre. We continue to see
growth in new entities related to ILS transactions but also a
steady stream of more conventional captive insurance vehicles.
"Much of our business continues to originate from the UK
but the figures show the truly international nature of our client
base, with a growing number coming from domiciles in Europe and
much further afield."
The latest figures show that there were a total of 797
international insurers licensed in Guernsey at the end of 2014,
comprising 242 limited companies, 67 PCCs, 436 PCC cells, 12 ICCs
and 40 ICC cells. This compares to a total of 758 international
insurers being licensed by the GFSC at the end of December 2013,
signifying a net growth of 39 entities during the 12 months.
While the number of ILS transactions being structured through
the Island has continued to increase over the past 12 to 18 months,
other transactions in the past year have demonstrated the depth and
breadth of Guernsey's insurance expertise.
Kelvin Re has become Guernsey's first rated commercial
reinsurer, while Artex Risk Solutions was selected to provide the
insurance management services for the BT Pension Scheme's
longevity risk vehicle BTPS Insurance ICC. Their first transaction
involved the Prudential Insurance Company of America completing
what was believed to be the largest longevity risk transaction
ever, assuming a quarter of the scheme's longevity exposure,
thereby hedging around $16 billion of liabilities.
Similarly, Towers Watson recently announced that it will provide
its pension clients with direct access to the reinsurance market
through the use of its ICC, Longevity Direct, managed by Willis.
Longevity Direct is aimed at providing cover through the
reinsurance market for liabilities between £1bn and
£3bn. The Merchant Navy Officers Pension Fund (MNOPF) has
subsequently become the first scheme to utilise this facility.
"Pension longevity risk has become a key strength for our
insurance sector towards the end of 2014 and we expect that to
continue into 2015. Likewise, we understand that a number of other
commercial reinsurance companies are in discussions to follow in
the footsteps of Kelvin Re, which is extremely pleasing," said
Guernsey is hosting the free to attend thought leadership event
'ILS Insight London' at the British Museum in London on
Wednesday 18 March. This event will bring together experts from
across the ILS space for dialogue and debate surrounding the key
industry issues. The first panel session will cover structuring
innovation and the critical factors enabling and restricting new
solutions, while the second will examine the range and depth of
Guernsey as an ILS jurisdiction.
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