The Guernsey Financial Services Commission (GFSC) licensed 45 new international insurers during the first six months of this year.
This comprised six limited companies, two Protected Cell Companies (PCCs), 30 PCC cells, one Incorporated Cell Company (ICC), two ICC cells and four life policy cells.
The figures mean that there were a total of 816 international insurers licensed in Guernsey at the end of June 2015, made up of 244 limited companies, 67 PCCs, 393 PCC cells, 13 ICCs, 40 ICC cells and 59 life policy cells. This compares to a total of 797 GFSC-licensed international insurers at the end of December 2014, signifying a net growth of 19 so far this year.
Dominic Wheatley, Chief Executive of Guernsey Finance, said: “These figures reinforce the fact that Guernsey is home to a vibrant international insurance centre and is able to provide solutions to meet a range of different risk management needs. The half-year figures are particularly impressive when you consider how they follow and maintain several years of strong performance in the sector.”
Further data on the new licences reveals that their owners’ originate from a range of locations such as the UK, Cayman Islands, Finland and Switzerland, while the range of businesses written includes Insurance Linked Securities (ILS) and insurance lines covering property, After the Event (ATE) legal expense and longevity risk.
The past 12 months have been particularly positive for Guernsey’s insurance industry as it has enhanced its reputation for risk management, particularly in relation to the emerging area of pension longevity risk where pension schemes utilise Guernsey captive and cell company structures such as ICCs to hedge longevity risk for their defined benefit liabilities. This was sparked by the BT Pension Scheme’s record-breaking £16 billion transfer of its liabilities to the Prudential Insurance Company of America using a Guernsey-based insurance company, BTPS Insurance ICC, to underwrite longevity arrangements which will protect the scheme against costs associated with potential increases in life expectancy. BTPS transferred longevity risk to the insurer, which in turn reinsured the longevity risk in the reinsurance market. Other schemes such as Towers Watson’s Longevity Direct structure have also followed a similar method.
“Guernsey’s experience and expertise in establishing and effectively utilising the cell company concept for businesses across the globe mean it is ideally positioned to service this emerging area and we expect that to continue in the latter part of this year. Those in charge of these pension schemes recognise the fact that Guernsey has modern and well-regarded insurance legislation and a reputation for innovation within the sector, which is supported by a mature financial services infrastructure,” said Mr Wheatley.
To expand on the Island’s emerging position in the area of pension longevity, Guernsey Finance is hosting the free-to-attend thought leadership event Longevity – is there life in captives? on Wednesday 14 October in London. The event, which takes places at the British Museum, will bring together experts from across the insurance and pension space for dialogue and debate surrounding the key industry issues.