12 February 2021

Guernsey licenses seven new captives in 2020

Guernsey licensed seven new captives in 2020, including three new captives and four new captive cells. It also licensed two special purpose vehicles.

The new launches mean Guernsey ended 2020 with 291 captives licensed and 43 special purpose vehicles. This is a slight drop from 2019, with 18 captives or cell licences surrendered. However, Guernsey still has more than a third of all Europe’s captive business, Guernsey Finance said.

Interest in captive formations was so strong in 2020 that “at one point the number of enquiries was a challenge for the industry to handle,” Guernsey Finance said - and it expects that interest to continue in 2021.

The year has started strongly, with Guernsey already seeing a new captive company, protected cell company and individual cell formations formed in 2021.

Surging interest in 2020 led to Guernsey introducing a fast-track pilot at the end of 2020, which is due to run to the end of 2021, to accelerate the licence application process for protected cells. Cells can be formed within 48 hours, Guernsey Finance said, meaning a captive is a viable option right up to the renewal date.

Eligible cells must be hosted by a protected cell company that is owned by a licensed insurance manager. The first formations using the scheme took place immediately on launch.

Mike Johns, chairman of the Guernsey International Insurance Association (GIIA), said: “New business has started to flow, which is excellent news, and I expect that we will see 2021 and 2022 proving to be good years for new formations and licensees.”

Guernsey is also seeing greater use of existing captives, Johns added, with owners looking to introduce new lines of business into their captive structures to counter hard market conditions.

Strategic Risk Solutions and Davies Captive Management have both recently announced they are establishing offices in Guernsey.