10 January 2013Analysis

Guernsey sets its sights on further success in 2013

Guernsey achieved considerable success in the captive sphere in 2012, and the jurisdiction is preparing for another fruitful year in 2013. Captive International spoke with Fiona Le Poidevin, chief executive of Guernsey Finance, about the domiciles continuing success and developments that look set to herald another strong year.

Last year was a great success for Guernsey as a captive insurance domicile and now we are looking to build on those strong foundations with further positive developments during 2013.

Latest figures from the regulator show that there were 748 licensed international insurers in Guernsey by the end of November 2012. During the previous twelve months, there had been net growth of 61 international insurers, with 105 additions and 44 surrenders. The fall in the number of limited companies was more than offset by the growth of protected cell companies (PCC), incorporated cell companies and in particular, associated cells.

The majority of these relate to the insurance products supporting mortgages being offered to purchasers of newly built homes in England, Scotland and Wales. There are only a small number of schemes but significant in that they are backed by the respective governments in the UK and represent another development in the use of the Guernsey-pioneered cell company concept.

Since establishing the PCC in 1997, Guernsey has continued to be at the centre of cell company innovation. For example, Aon’s White Rock Insurance Company PCC Limited was established in Guernsey as the first PCC in the world and has grown to be the largest structure of its kind globally. In addition, White Rock Insurance (Guernsey) ICC Limited – also Aon owned – was the first ICC in the world to be insurance licensed.

What is more, at the end of last year, Guernsey became home to the risk purpose trust (RPT) when Robus Group, a Guernsey-based provider of insurance management and corporate services and Marlborough Trust, a Guernsey-based independent trust company, jointly launched Princeps.

Guernsey’s expertise in both the insurance and investment fields make it an ideal home for ILS arrangements. Bedell Cristin’s Guernsey office provided legal advice to Swiss ILS managers, Solidum Partners for establishing Guernsey reinsurance structures and a related catastrophe reinsurance risk listing on the Channel Islands Stock Exchange (CISX), which is the first private catastrophe bond listed on any exchange worldwide.

These factors, combined with the fact that Guernsey is not currently seeking equivalence with Solvency II, mean that the Island has experienced growth that has cemented its position as the largest captive insurance domicile in Europe and number four globally.