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4 February 2022ILS

Barbados shrugs off tax worries to record strong year for captive registrations

Barbados saw strong growth in its captives insurance sector last year, showing it remains in the top tier of domiciles, the Barbados International Business Association (BIBA) Derrick Cummins said this week.

Speaking at the launch of the Barbados Risk & Insurance Management (BRIM) 2022 Conference, he told reporters that Financial Services Commission figures were encouraging.

“What we can say is that 2021 showed strong growth again in the captive insurance sector,” he said. Total captive numbers rose from 279 to 308, with few deregistering and 34 new captives set up – more than double the increase in 2020.

In keeping with the past, Canadian companies accounted for the lion’s share of new captives (16, bringing the total on the island to 154). At the same time, there were also new captives from Latin America and the USA.

The growth came despite concerns over moves to impose a global minimum tax rate, potentially weakening Barbados’s appeal.

“We understand that taxation is just one of four of the key principle parameters that people employ or review when they are selecting a jurisdiction. Others are regulation, infrastructure and the perception of the jurisdiction, and we’re happy to say Barbados continues to be very competitive in these areas,” said Cummins

“We continue to hit all the right parameters… that make Barbados an attractive domicile not just for international business but also specifically for captive insurance.”

The sector had also benefited from the hard market and concerns around the pandemic, he added.

“The global pandemic continues to disrupt business across all industries with risks to employees, clients and business continuity becoming increasingly challenging to manage,” he said. “What this has done is create ideal conditions for companies to set up structures for self-protection and to help mitigate these risks that commercial insurance entities have started to shy away from.”