Insurance buyers and intermediaries have stepped up their
interest in using captives as a result of attending last week's
Guernsey seminar 'Captive insurance – beat the
The event saw insurance industry experts from Guernsey and the
UK tell a London audience why there is no better time to establish
a captive and the extensive opportunities that exist in the Island
– the leading captive domicile in Europe.
Peter Niven, Chief Executive of Guernsey Finance – the
promotional agency for the Island's finance industry, said:
"This seminar was designed to capitalise on the evolving
market conditions and from the attendance figures and the response
we received it has certainly been a major success. Our service
providers have seen an increasing number of inquiries about
captives in the past few months because of changing conditions in
the commercial market, not least the hardening of premium rates.
This attitude was reflected in the number and quality of insurance
buyers and intermediaries that attended the seminar. The feedback
that we received was also very positive. Many of the attendees
spoke of how this event has inspired them to look much more closely
at using captives in the future."
Lee Banks of Towergate Risk Solutions, a retail broker in the
bus, coach and haulage sectors, said: "I had come across
captives but I didn't know much about them, although I have
been involved in some unconventional deals. The event was very
informative and I will be delving into it more as I think it could
certainly benefit some of my clients."
The seminar took place on Thursday 7 May at the Grange City
Hotel in Coopers Row. The expert panel comprised: Alan Fleming,
AIRMIC; Callum Beaton, Callum Beaton Insurance Consulting; Jeff
Soar, Ernst & Young; and Peter Child, Heritage Insurance
Mr Child said: "The audience was the right mix; several
practitioners from Guernsey and a good number of insurance
professionals from the UK with some people potentially considering
the services Guernsey has to offer, which is an absolute result as
far as I am concerned."
The panel examined the concept of captive insurance and its
'traditional' benefits such as the retention of premiums
within the group and the potential for its return to the parent (as
well as investment income) should there be no claims. There was
then analysis of how the impact of the credit crunch on the
commercial insurance market is making captives even more attractive
and how acting now will provide maximum gain.
In addition, they also looked at how planned changes by the UK
to its Controlled Foreign Company (CFC) and Acceptable Distribution
Policy (ADP) rules will affect captives and the potential for
mitigating the impact through the use of cell companies.
Marc Yana, AIG, said: "We are doing a lot of fronting for
the captive industry and we manage the exit strategy for the
captives. We are interested in how the market develops and this was
a good way to maintain connection with the Guernsey managers. I was
interested in the changes to the way in which captives can benefit
in the tax area."
Mr Niven added: "A great breadth of finance business is
carried out in Guernsey so while the global downturn is adversely
impacting flows within some sectors, others are seeing an upswing
or have identified new prospects. One of the clearest opportunities
is within captive insurance. This seminar is part of ongoing
efforts to get out these positive messages to key decision makers
so that Guernsey can continue to draw in new business flows in what
are otherwise difficult times."
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