The choice of domicile for Insurance-Linked Securities (ILS) transactions was among the topics discussed by leading industry players at a Guernsey Finance-hosted event in Zurich.
The event attracted 80 delegates from around the world, including Japan, Hong Kong, France, the UK and Switzerland and from across the asset management, wealth management and reinsurance and adviser communities.
Domicile choice was the theme that stood out during the two panel discussions, with Guernsey in particular singled out for praise.
The first panel session focused on the renewal season and recapped on the key trends of 2014 with a particular focus on modelling, pricing, transformation structures, choice of domicile and particular challenges in the space.
They also considered the structures used in ILS, such as the Protected Cell Company and the Incorporated Cell Company, as well as the need for pre-authorisation and fast track regulatory regimes.
The second panel session looked at investment and concentrated on the challenges of investing in ILS, investor perceptions and the comparative merits of certain types of investment strcutures.
The panel concluded that managers were increasingly allocating to ILS due to the fact that it was uncorrelated to the wider markets at a time when investors are seeking liquidity and an income stream.
Fiona Le Poidevin, chief executive of Guernsey Finance, said: “There was recognition from the panellists that Guernsey brings something different to the market in terms of domiciling ILS structures.”
“Guernsey is very attractive because of our experience of insurance business, together with the structuring of investment funds and listing vehicles and this means that what we offer is differentiated to other domiciles.”
New figures show that the Guernsey regulator licensed 96 new international insurance entities in the 12 months to the end of May 2014, with a significant number related to ILS.
There were a total of 796 international insurance entities domiciled in the island by the end of March 2014.
