Guernsey grows registrations for collateralised reinsurance and ILS

The latest insurance and reinsurance entity registration figures from the Guernsey Financial Services Commission (GFSC) show that the domicile has continues to grow the formation of protected and incorporated cells, many ILS related, over the last year.

The latest figures show insurance registrations in Guernsey for the last twelve months, to the end of March 2014. In that period 99 registrations were recorded in total, an increase in run-rate from the 89 reported for the full-year of 2013 that Artemis reported previously.

The increase in insurance and reinsurance registrations was largely due to the formation of protected and incorporated cells, many of which are utilised by either insurance-linked securities specialists or reinsurers looking to transact reinsurance contracts on a fully-collateralised basis.

These collateralised reinsurance activities in Guernsey are not restricted to non-life or property catastrophe risks, the island plays host to many ILS specialists looking to collateralise life reinsurance contracts as well.

In the twelve months to the end of March 2014 Guernsey saw the registration of 8 limited companies, 5 Protected Cell Companies (PCCs), 73 PCC cells, 3 Incorporated Cell Companies (ICCs) and 10 ICC cells.

That compares to 10 new limited companies, 6 Protected Cell Companies (PCCs), 63 PCC cells, 2 Incorporated Cell Companies (ICCs) and 8 ICC cells for the full-year of 2013, which shows that the growth in registrations is coming from cell company activities in Guernsey.

Fiona Le Poidevin, Chief Executive of Guernsey Finance, commented; “There appears to be no let-up in the number of international insurance licence applications being approved by the Guernsey regulator. We are seeing continuing growth in new entities related to Insurance Linked Securities (ILS) transactions but also a steady stream of more conventional captive insurance vehicles.”

The latest figures show that there were a total of 790 international insurers licensed in the Island at the end of March 2014, comprising 243 limited companies, 70 PCCs, 439 PCC cells, 8 ICCs and 30 ICC cells. That’s growth of 32 new entities in the first three months of 2014, which was largely driven by the formation of 25 new PCC cells a common structure for ILS and collateralised reinsurance business.

Miss Le Poidevin added; “Guernsey’s insurance sector remains buoyant and we have seen a particularly significant increase in ILS transactions being structured through the Island during the last 12 to 18 months. The fact that we have strength and depth across both the insurance and investment sectors means that the Island is ideally placed to service this business and the continued demand for ILS is something we are looking to capitalise on further during this year. ”