Guernsey strategic review sees captives offering growth opportunity

A strategic review of Guernsey's insurance sector has found that captives offer the best new business growth opportunity as a result of the harsh market conditions and distressed classes of business such as D&O and cyber. The review was carried out by Cutts-Watson-Consulting Limited (CWC), in association with the Committee for Economic Development, and is an update on an original review of the sector carried out by PwC in 2016. It aims to assist in the development, promotion and long-term success of the sector, both domestically and internationally. The committee said it recognises the significant contribution of the sector to the economy and is keen to support its continued success in the medium to long term. It said the review will assist the island, and the committee, in the development of a strategic plan with clear actions and priorities. Malcom Cutts-Watson, chairman of CWC, said: “This review comes at an opportune time, with global insurance markets under severe strain as a result of tough market conditions and the impact of the pandemic. A range of opportunities have been identified to further strengthen Guernsey's insurance proposition by enhancing the client experience, expanding the range of products and services offered, and opening up new markets. The recommendations contained within the review provide a blueprint for immediate and longer-term growth.” According to the report: “Based on effort vs reward, captives offer the best new business growth opportunity. Actions identified are: exploit the hard market conditions; understand and promote the role captives can play for wealth structures such as family offices; and lack of, or gaps in, coverage arising from Covid-19 exposures can be written by captives.” In terms of innovation, the report says the domicile should promote the hybrid protected cell company model and facilitate the union of capital providers and insurance entrepreneurs, as well assess the viability of an ESG ‘green’ investment fund for Guernsey insurers. The report also calls for the reintroduction of the Guernsey Insurance Forum. Deputy Nick Moakes, member of the Committee for Economic Development, said: “Guernsey's insurance sector has proven itself to be innovative and successful, despite difficult market conditions and the impact of Covid. It demonstrates a significant success story and a sector that is a world leader in providing new solutions to meet clients' needs. The implementation of the review's recommendations by all stakeholders will benefit the economy and the profitability of this sector. It could also facilitate growth in employee numbers and the number of licensed entities on the island.” Mark Elliott, chairman of the Guernsey International Insurance Association (GIIA), said: “The GIIA would like to thank the States of Guernsey, and particularly the Committee for Economic Development, for its support of this review. Guernsey's longstanding position as the leading specialist insurance centre in Europe is one we are all rightly proud of. This review will allow us to maintain and enhance that position in a number of exciting ways. We look forward to working with all stakeholders in this process to implement the recommendations and keep Guernsey at the forefront of insurance innovation going forwards.”

Guernsey strategic review sees captives offering growth opportunity

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