A stable and robust regulatory environment
The Cayman Islands has a proven track record as a captive insurance domicile of choice due to its robust regulatory environment as well as the scope of services provided on-island by the industry. The Cayman Islands Monetary Authority (CIMA) provides sound stewardship of its licensed captives with its thorough knowledge of underwriting programmes and oversight of strong, corporate governance procedures.
As of September, Cayman has 687 licensed class B and C insurers, 29 of which are new this year. CIMA expects to grant at least another 10 before year-end, pushing the total number of new incorporations over 40 for the year. CIMA is staying on the cutting edge with the establishment of regulatory procedures for virtual asset service providers, recognising the evolution in the world’s currencies.
Growth in the captive sector
Commercial insurers and reinsurers are routinely gauging the value of establishing a presence in Cayman. This way they can have a foothold in the domicile and take advantage of the benefits of being in the Cayman Islands, where employees can be afforded a more rewarding experience personally and for their families.
From a captive ownership perspective, Cayman provides a seamless experience when forming an insurance company, whether it is for a commercial insurer/reinsurer or for a captive whereby the owners come to enjoy a long-standing stable relationship that ensures success.
This growth of captives under management is not limited to newly established captives; it also applies to the expansion of existing captives. Beecher’s goal is to utilise the capital of its clients’ captives more efficiently by supporting additional lines of insurance coverages, increased retentions and quota share participations to fill out slips and maintain pricing such as on excess umbrellas and layered property programmes.
Group member insured-owned captives and segregated cell captives have benefited by increased membership, making their programmes available to small and medium-sized enterprise (SME) employers who would otherwise not be able to support a captive on their own.
In addition to overseeing the formation of several new captives, Clayton Price, (pictured) managing director of Beecher Carlson Cayman, said he has helped clients deciding to novate blocks of business into existing Cayman captives, thus benefiting from improved efficiencies. He has also experienced captives changing from a class B(i) licensed insurer to accommodate the writing of third party business, including managing general underwriter and other reinsurance transactions as a class B(iii) licensed insurer.
“I am seeing more captives being used to support integrated programmes as captive owners evaluate the total cost of risk across their organisations with innovative solutions,” he said.
“With the support of the consultancy practice within owner Brown & Brown, Beecher has been able to provide strategic solutions, including Risk Aligned Financing structures being delivered to clients, which are driven by data analytics.
“Our captive consultancy has been a tremendous resource in facilitating growth in the captive insurance industry, thanks to its analytical capabilities,” he explained.
He is not seeing any signs of abatement of growth in the captive insurance sector. It is predicted that SME employers will continue to seek a captive solution by participating in either a group programme or a cell structure whereby programme business can be aggregated into a captive structure.
The long-standing presence that Cayman has in its regulation of captives means it will maintain its position as a leader in the industry.
“Our captive consultancy has been a tremendous resource in facilitating growth in the captive insurance industry.” Clayton Price
Domicile trends
Over the course of his career, Price notes, early on it was simplest to refer to states that had legislation for captives, such as Vermont, Tennessee, Colorado and Georgia. On the international scene, new domiciles are entering the captive space, with France and Italy both putting forward legislation and the UK Chancellor of the Exchequer having launched a three-month consultation period for a captive regulatory regime in November.
This “nationalisation” of captive programmes can be expected to evolve (similar to the situation in the US, where the majority of states now have legislation). However, the long-standing presence that Cayman has in its regulation of captives means it will maintain its position as a leader in the industry, Price affirms.
Work-life balance
As Beecher continues to grow its captive practice, it remains focused on its client service which is supported by a strong work environment that acknowledges boundaries between the personal and professional life of its teammates, Price says.
“Following COVID-19, remote work has become extremely common. Beecher and Brown & Brown recognise this and take a keen interest in maintaining a healthy boundary between work and personal life to keep team members engaged,” he said.
“The company’s work-life balance approach provides the foundation for strategic thinking and proactive measures to address the challenges that occur within the captive industry as it continues to evolve.”
In 2023 and 2024, Brown & Brown received the Platinum Level Bell Seal for Workplace Mental Health from Mental Health America. Also in 2024, Brown & Brown has been certified by “Great Places to Work” for the sixth consecutive year. This certification recognises the company’s consistent and intentional dedication to its employees’ experience which has resulted in the company achieving a high 90+ percentage rating as a great place to work as well as being highly rated for making new employees feel welcome.
“The company’s commitment to excellence, integrity and investment in its personnel and clients is what serves as the foundation of the company’s success. Through its best-in-class and scope of innovative services Beecher, along with Brown & Brown, is well-positioned to continue its growth both in volume and variety as a powerful and influential leader in the Cayman captive industry,” Price concluded.
Clayton Price is managing director of Beecher Carlson Cayman. He can be contacted at cprice@beechercarlson.com
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