Hon. Alden McLaughlin
1 December 2017Analysis

A framework for success

The Cayman Islands’ reputation as an international financial centre has been earned over many decades, thanks to a robust financial services industry that caters to sound business in a number of sectors including, quite importantly, captive insurance.

Cayman’s position as a global leader in captives is founded upon a sturdy framework for business, including legislation that gives captives greater choice on how they are established and managed.

As a government, it’s our unique responsibility to ensure that the legislative and regulatory framework in which our industry operates meets the needs of clients. In doing so, however, we naturally draw upon the expert knowledge and capabilities of our financial services regulator, the Cayman Islands Monetary Association (CIMA); and the Insurance Managers Association of Cayman (IMAC), which solidly represents the industry sector. The end result is that government policy, legislation, and regulation meet global standards as well as client needs.

In this manner, government’s framework provides a compelling business case for captives to domicile here.

From a jurisdictional governance and stability standpoint, captives can also note that government has a clear fiscal policy that will benefit our key stakeholders over the next three years. In our 2018 Strategic Policy Statement, government commits to completing a number of important capital projects, including the Owen Roberts International Airport renovations, and constructing a modern cruise pier and cargo dock.

The redevelopment of Owen Roberts International Airport, for example, is well underway with the final phases of construction and the expansion of the terminal expected to be completed in spring 2019. When finished, it will meet increasing visitor air arrivals and form a key part of our five-year National Tourism Plan.

In addition, we continue to make progress on creating a modern cruise berthing facility and an enlarged cargo port. The redesign of the piers to dramatically reduce dredging and impact on the environment is now finished, complete with preliminary designs and cost estimations. Prequalification of bidders and negotiations with cruise lines are ongoing, as well as the preparation of bid documents, with a projected tender issue date of late September 2017.

Statistics and projections in the Strategic Policy Statement also underscore Cayman’s stability.

The 2 percent reduction in duty costs, which was put in place by my previous administration, will remain in place.

Our national debt fell from about $574 million three years ago, to $451 million as at the end of the last fiscal year. By December 31, 2020, under current plans, debt will be further reduced to $221 million.

Unemployment fell from 10.5 percent in 2012 to 5.7 percent in spring 2016. It is now predicted to remain below 4 percent over the next three years.

Moreover, we will continue to enjoy economic growth: since 2014, Cayman’s GDP has grown on average by 2 percent annually, and is expected to continue that trend over the next three years.

Ultimately, we are confident that our framework and political stability will continue to positively affect Cayman’s standing as a jurisdiction of choice for captive insurance business.

On behalf of government I thank the members of IMAC for their commitment to promoting Cayman’s captives sector and I also thank CIMA, for their firm commitment to upholding the principles of sound business.

With captives, and indeed in all financial services sectors, the best outcomes happen when all stakeholders clearly articulate their respective positions and work together to ensure all responsibilities are met, and benefits achieved.

The Cayman Islands therefore is pleased with our success in captives, and equally pleased with the benefits provided to clients. Never content to rest on our jurisdictional laurels, government looks forward to continuing our dialogue with CIMA and IMAC, to ensure that Cayman’s success extends well into the future.