Cayman Islands insurance sector poised for more growth in 2024
At the start of the last day of Cayman Captive Forum 2024 Kara Ebanks, head of the Insurance Supervision Division at the Cayman Islands Monetary Authority (CIMA), highlighted the resilience, adaptability, and progress of the jurisdiction's insurance sector.
Ebanks began by addressing the complex economic landscape, marked by high interest rates and economic constraints. Despite these challenges, the Cayman Islands' insurance sector continues to thrive. "This sustained growth," Ebanks noted, "is a testament to the effectiveness and strength of the jurisdiction's robust regulatory framework."
The sector achieved its eighth consecutive year of growth last year, with nearly 700 international insurance entities operating in the jurisdiction. Licensing activity in 2023 was particularly robust, with 41 new license formations and 15 applications under review. "This pace suggests we are on track to either exceed or closely match last year’s figures," she added.
Ebanks stressed the key trends driving the insurance sector’s evolution, including:
- Emerging Risks and ESG Strategies: Growing interest in addressing climate-related risks, integrating environmental, social, and governance (ESG) principles, and utilising self-insurance models for property catastrophe risks.
- Technological Advances: Captives are leveraging artificial intelligence and data analytics to enhance operational efficiencies and manage cybersecurity risks.
- Healthcare and Reinsurance Growth: Increased claims and litigations in medical professional liability have driven healthcare captives to reassess risk exposures. Meanwhile, reinsurance formations now outpace captive formations, representing 64% of new licenses.
"Captives are increasingly seen as cost-effective tools for their members, with new group captives forming and existing ones expanding," she remarked.
The Cayman Islands' reputation as a reinsurance hub continues to grow. Ebanks highlighted the rise of reinsurance entities backed by private investment structures, demonstrating the jurisdiction’s appeal to global markets. Additionally, affiliated entities are being established to enhance access to the reinsurance market.
With total premiums of $41 billion and assets of $154 billion as of September 30, 2024, the international insurance market remains a significant contributor to the local economy. Ebanks shared, “The captive insurance sector accounts for approximately $11 billion in premiums and $38 billion in assets, contributing over $280 million to the local economy annually.”
Ebanks emphasised the Cayman Islands’ commitment to international compliance. “CIMA has executed over 70 bilateral and multilateral agreements with regulatory bodies worldwide," she stated. This includes a key Memorandum of Understanding with the National Association of Insurance Commissioners (NAIC).
The Cayman Islands has also transitioned to a guest member of the Financial Action Task Force’s regional body, showcasing its commitment to quality and transparency.
Looking ahead to 2025, Ebanks identified key priorities. These include addressing emerging risks, including climate change and cyber threats, expanding regulatory frameworks to accommodate new license classes and strengthening cross-border regulatory collaborations.
“The jurisdiction is well-positioned for continued growth, driven by innovation, robust governance, and sustainable practices,” Ebanks concluded.
As a final note, she praised the partnership with IMAC and attendees’ commitment to the Cayman Islands, stating, "We’re not just beaches. We’re a thriving, credible, and robust financial centre."
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