Guernsey’s insurance-linked securities (ILS) market has seen a positive start to the year and is outperforming 2017.
Statistics for protected cell company (PCC) cells, the main method of writing new ILS business, are, to date, well ahead of those for 2017.
Industry figures show business flows, from both established and new clients, have been good so far in 2018, with the industry seeing an overall net growth, including ILS, of 2.2 percent last year, with a top line growth of 10 percent.
As of year-end 2017, PCC cells represented 57 percent of the 853 international insurers in Guernsey.
Derek Maddison, chairman of the Guernsey International Insurance Association, said one of the industry drivers was the increasing number of natural catastrophes for which people are seeking cover.
Maddison said: “Some of these risks can be difficult to place in conventional insurance markets.”
“There may not be enough capacity or the insureds may want a particular trigger to be used instead of proving an event in the conventional insurance sense.”
“There is also a growing appetite among the institutional investors to diversify into such risks.”
Guernsey Finance chief executive Dominic Wheatley commented: “These are exciting times for ILS.”
“With international fragility and uncertainty on the rise, and innovation in the market, the ILS sector is rapidly developing.”
The Guernsey insurance industry has been considering establishing entities combining insurance and investment activity in one vehicle.
Guernsey lawyer Christopher Anderson, partner at Carey Olsen, said: “Although this is at an early stage, this could present significant efficiencies for ILS fund managers.”
