Cayman Islands maintain strong position in captive market
The Cayman Islands continues to maintain its position as the second largest domicile for captives and a dominant jurisdiction worldwide for healthcare captives, group captives and catastrophe bonds, according to the latest report from the Cayman Islands Monetary Authority (CIMA).
In CIMA’s 2024 annual report it said that despite the challenging market conditions, the prevailing high-interest rate environment, and a notable economic downturn, the Cayman Islands' insurance sector has consistently shown resilience, marking its seventh consecutive year of growth in new formations.
According to CIMA there are now 683 Cayman-based international insurance companies, including 41 new international insurers and 154 segregated portfolio companies.
CIMA said that there were $57.6 billion in premiums in 2024, an increase of 150.43% since 2022, with $74.1 billion assets held, an increase of 87.51% since 2022.
The Authority stated that: “Since the previous update in 2022, the jurisdiction continues to see an increase in reinsurance company formations, signifying that the jurisdiction is quickly solidifying its position as an international hub for reinsurance business. Amid the prolonged market challenges and economic constraints, captives have led the new license formations for 2023.”
CIMA added that the global insurance market, particularly the US which is the key source of business for the Cayman Islands international insurance sector, continued to harden in 2023 thus resulting in premium rate increases, contract exclusions, higher deductibles, and reduced coverage. With the rising inflation and forecasted global recession, this state of the global insurance market is expected to continue, at least in the medium term.
As a result, CIMA said, the insurance market in the Cayman Islands has seen and will continue to see increased utilisation of captives with captive owners seeking to retain more risks in their self-insurance vehicles to mitigate the rising insurance costs and to provide additional capacity for insurance coverage.
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