Cayman International Insurance
Weathering the storm
It has been a challenging year for the whole industry but the Cayman Islands has strengthened its reputation, says Colin Robinson, chairman of Cayman International Insurance.
The events of 2020 have meant many of the usual norms being put on hold—at least temporarily. The usual captive insurer board meeting season has been replaced by a seemingly endless array of Zoom calls and other online-only exchanges.
The Cayman Islands captives calendar has missed our usual Cayman Captive Forum and the more than 1,500 participants it brings together annually. COVID-19 has certainly changed our lives but for the captive insurance industry in the Cayman Islands, we have weathered the storm, and are looking forward to a bright future.
Despite lockdown orders and other measures put in place to limit the spread of COVID-19, service levels for Cayman Islands-based managers have been minimally affected. Managers have implemented the business continuity plans that were primarily developed with hurricanes and other natural disasters in mind. As a result, there was a seamless transition for our managers and regulator to meet the needs of our clients outside the usual office environment. This fact has certainly been borne out in the new formations to date.
“Consolidation in this industry hasn’t slowed but has led Cayman captives to being larger.”
Through September 30, 2020, the Cayman Islands Monetary Authority has issued licences for 20 new insurers, comprising 17 class B licences, 2 class C licences, and one class D licence. In addition to this, nine new portfolio insurance companies have been registered.
As prospective clients look towards a January 1 start for their new captive, we fully anticipate the fourth quarter being a busy time for new formations. Cayman International Insurance expects another strong year for new formations during what would otherwise be expected to be a difficult time.
Healthcare industry associated captives remain the backbone of our industry, with approximately 33 percent of Cayman captives writing coverage that totals in excess of $6 billion in premiums. Consolidation in this industry hasn’t slowed but has led Cayman captives to being larger, more mature, and more able to assist the parent in meeting their needs for both professional liability coverage and other needs such as medical stop loss.
“We are firmly placed as being the domicile of choice for new clients in all industries.”
Outside healthcare, the Cayman Islands continued the trend of further diversifying our offerings.
Workers’ compensation captives wrote $4.5 billion of coverage as of September 30, 2020. Group captives account for 19 percent of our licensees, with nearly $10 billion of premiums written at that same period. The Cayman Islands has registered more than 30 portfolio insurance companies since their creation in 2015. This innovative structure has been quickly growing and is yet another key differentiator in the Cayman captives toolbox.
In 2020 the Cayman Islands has adopted new legislation that affirms our good standing in global standards. This status was recently reaffirmed with the EU Code of Conduct Group confirming our position as a jurisdiction that is cooperative for tax purposes. Our strong regulatory system complies with and, in many instances exceeds, that of our peers. The Cayman Islands government continues to lead with legislation that meets the necessary standards and maintains the traditional regulatory flexibility that our clients appreciate.
While 2020 has had its share of headwinds, Cayman International Insurance is proud of the work that our professionals have been able to achieve. With the market continuing to harden, we are firmly placed as being the domicile of choice for new clients in all industries who are seeking to control their own insurance destinies.
I look forward to our continued growth and most importantly to seeing you, in person, at the 2021 Cayman Captive Forum.