7 January 2015Cayman analysis

Here to stay

Around a decade ago, international professionals would come to work in Cayman and leave after two to four years, but this is changing. Cayman Captive spoke to two such professionals about the Island’s allure, its growing talent pool, and why it may be the most experienced and qualified captive insurance domicile in the world.

When JS de Jager, senior vice president of CSI International Underwriting, arrived in the Cayman Islands from South Africa some seven years ago, he was initially planning to stay for only a couple of years to get some offshore work and life experience.

Staying for such a period was the norm for professionals back then—it was treated as a kind of extended professional gap year during which a different kind of working experience would be gained before heading back to whatever financial services hub was closest to their original home.

But this mentality is increasingly changing. Seven years after arriving, de Jager is completely engrossed in the Caymanian way of life. He has also represented the Islands in a number of international test rugby test matches.

“Professionals are usually staying for much longer now and I’ve seen that happen since I’ve been here,” de Jager says. “In the beginning it was very transient: you would see large leaving parties for people who may have worked an 18-month or two-year contract, mostly in the audit circles.”

Finding talent locally

De Jager adds that one of the driving forces in this is that people started to realise that management companies in Cayman, whether it be captive managers, corporate managers or fund services, increasingly preferred to recruit from the talent on-Island rather than drafting in someone from overseas with no experience of working in Cayman.

“You see a lot of people moving from audit into the private sector and staying for much longer, especially in the last four or five years,” de Jager says.

He says the shift has been caused partly by a number of jurisdictional advantages that Cayman holds over other offshore domiciles.

First, it is possible to own property as an expat in Cayman—a significant bonus when professionals are considering relocating their careers. In Bermuda, it is not usually possible to get on the property ladder as an expat meaning many professionals have no choice but to rent at a very high premium, de Jager explains.

Property is not the only factor that makes Cayman appealing to expats. De Jager says that the quality of life on-island is of a very high quality and the community spirit is exceptionally good.

“There’s something for everyone here,” he says. “Through various sporting programmes and a strong sense of cultural identity, it’s a very active, involved community.”

De Jager says this trend has boosted the quality of professional talent on the Islands. He stresses that whether it is with new or existing clients, professionals are working with a pool of people that are familiar with what is happening in Cayman’s captive insurance industry.

"They've audited so many companies that by the time they move into public practice or management services, they are very well versed in what they're doing" JS DE Jager

“People realise when they start working here that 99 percent of the people in the office, whether they be Caymanian or expats, are all very well educated and highly qualified—so it’s nice to work with people who know exactly what they’re doing,” he says.

De Jager believes this dynamic also encourages talent to remain on Cayman.

“They know the regulations; they’ve audited so many companies that by the time they move into public practice or management services, they are very well versed in what they’re doing,” he says. “Then they are guided through the audit experience into what is more of a financial executive role, which is great. Clients really appreciate that.”

De Jager adds that depending on where the expat comes from, the biggest lure is the Caymanian lifestyle, which is “unlike anywhere else”.

“You work really hard, and then you walk out of the door and you’re living on a Caribbean island,” he says. “Sometimes you have to pinch yourself to make sure it is all real.”

He believes that another big driver of this change was the extending of Cayman’s rollover policy from seven to nine years, meaning that more people can apply for permanent residence depending on the management level they hold within a company and other factors as determined by the Department of Immigration.

“People realise that in that time, you can actually buy your own house if you want to,” he says. “If you want to leave after nine years then fine, but by then you could have built up a good investment in property through owning your own home or buying an investment property on the Island.

“People want freedom and they can find it in Cayman.”

Conor Jennings, the managing director of Captiva Insurance Managers, agrees that Cayman does a good job of differentiating itself from other territories and domiciles, and has no doubt that the Island has many alluring factors that cannot be found elsewhere.

“The difference I find in Cayman is that there are proportionally far more qualified accountants in the industry than elsewhere,” he says. “The stats are quite impressive. The reason we have so many accountants is because we’re a large fund centre and a lot of the big audit firms are here.”

“There is also a lot of insurance-linked securities (ILS) business here,” he adds. “It’s about blending insurance and fund management, and Cayman is a good place to do that.”

High quality staff

A survey of 19 insurance management firms carried out in October by the Insurance Managers Association of Cayman (IMAC) suggests that the quality of captive insurance professionals in such a large and successful captive domicile is exceptionally high.

The statistics show that out of a total of 253 staff employed in the captive sector, an impressive 64 percent hold professional qualifications. Fifty percent of the total (127) and 78 percent of the qualified ones are qualified accountants, while the remaining 22 percent hold mostly professional insurance and/or legal qualifications such as chartered insurers, risk managers, lawyers, chartered secretaries, etc.

There are a number of reasons for these results.

Cayman as a global financial centre is the home to many international organisations. This attracts the world’s largest accounting firms who employ many newly qualified accountants from all around the world every year. Many of these young auditors then move into the captive arena and remain in Cayman.

The majority of captives in Cayman are reinsurance captives, which deal with insurance companies in the US. These onshore insurance companies do much of the underwriting and manage the claims, leaving the accounting and investment work to the captive.

Captives that need specialist underwriting and claims services can certainly find those professionals in the industry, especially with the larger insurance managers that look after captives with international insurance programmes.

Another interesting finding from the report indicates that the time people have spent working with captives averages out at well over 10 years.

This was made up of both young accountants recently recruited from the audit firms and extremely experienced professionals who have been managing captives for more than 20 years. Most captive management firms’ employees are a combination of both.