The Guernsey Financial Services Commission (GFSC) licensed 85 new international insurers during 2014.
This includes eight limited companies, three Protected Cell Companies (PCCs), 54 PCC cells, five Incorporated Cell Companies (ICCs) and 15 ICC cells.
The owners of the 85 licensed entities originate from a range of locations, including the UK (35 percent), Cayman Islands (29 percent) and Ireland (13 percent),
Of the business written in the 12 months to 31 December 2014, 45 percent was in Insurance Linked Securities (ILS), while insurance lines covering property (13 percent), life/health (8 percent), and After the Event legal expense (7 percent) was also prominent.
Dominic Wheatley, chief executive of Guernsey Finance, said: “These figures show that last year was very successful for Guernsey as an international insurance centre. We continue to see growth in new entities related to ILS transactions but also a steady stream of more conventional captive insurance vehicles.”
“Much of our business continues to originate from the UK but the figures show the truly international nature of our client base, with a growing number coming from domiciles in Europe and much further afield.”
Kelvin Re has become Guernsey’s first rated commercial reinsurer, while Artex Risk Solutions was selected to provide the insurance management services for the BT Pension Scheme’s longevity risk vehicle BTPS Insurance ICC.
Their first transaction involved the Prudential Insurance Company of America completing what was believed to be the largest longevity risk transaction ever, assuming a quarter of the scheme’s longevity exposure, thereby hedging around $16 billion of liabilities.
Similarly, Towers Watson recently announced that it will provide its pension clients with direct access to the reinsurance market through the use of its ICC, Longevity Direct, managed by Willis.
Longevity Direct is aimed at providing cover through the reinsurance market for liabilities between £1bn and £3bn. The Merchant Navy Officers Pension Fund has subsequently become the first scheme to utilise this facility.
“Pension longevity risk has become a key strength for our insurance sector towards the end of 2014 and we expect that to continue into 2015. Likewise, we understand that a number of other commercial reinsurance companies are in discussions to follow in the footsteps of Kelvin Re, which is extremely pleasing,” commented Wheatley.
Guernsey is hosting the ILS Insight London at the British Museum in London on 28 March. This event will bring together speakers from across the ILS space for dialogue and debate surrounding the key industry issues.
The first panel session will cover structuring innovation and the critical factors enabling and restricting new solutions, while the second will examine the range and depth of Guernsey as an ILS jurisdiction.
