Guernsey licensed seven new captives in 2020 and expects to see a significant rise in 2021 following adoption of a new fast-track pre-authorisation licensing scheme at the end of last year.
Europe's largest captive insurance jurisdiction added three new captives, four new captive cells, and two special purpose vehicles in 2020, a year where interest in captive formations was so strong at one point the number of inquires was a challenge for the industry to handle.
2021 has already seen a new captive company, protected cell company and individual cell formations
"New business has started to flow, which is excellent news, and I expect that we will see 2021 and 2022 proving to be good years for new formations and licensees," said Mike Johns, Chairman of the Guernsey International Insurance Association (GIIA).
The fast-track pilot, due to run to the end of 2021, was introduced to accelerate the licence application process to deal with the surge in interest. Under the pilot, captives can be formed within 48 hours, allowing a captive option to remain a viable part of renewal consideration right up to the renewal date.
The scheme is currently limited to protected cells, hosted by a protected cell company that is owned by a licensed insurance manager. Initial interest has been positive and the first formations using the scheme took place immediately on launch.
Mr Johns said Guernsey was also seeing greater use of existing captives as owners looked to introduce new lines of business into their captive structures to counter hard market conditions.
Guernsey ended 2020 with 291 captives licensed and 43 special purpose vehicles, a slight drop from 2019 with 18 captives or cell licences surrendered. Guernsey still has more than a third of all Europe's captive business.
This week it was also announced that two established captive managers, Strategic Risk Solutions and Davies Captive Management, are looking to establish a base in the island.
Hear about how the captive industry is innovating in response to the current climate, and about Guernsey's strengths in the market, at our webinar on February 24. from a panel of speakers with wide experience of international corporate insurance and risk management. Learn more here.
For more information about Guernsey's finance industry please visit www.weareguernsey.com.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.