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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

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Guernsey Domicile Reports a Jump in Captive Formations

February 28, 2020

Guernsey reported 11 new captive structures were registered in the domicile during 2019, its best result since 2016. A jump in interest in captive insurance structures was seen in the last few months of 2019, according to a statement from the domicile.

Of the 11 new structures registered in 2019, 4 were cell company captives, bringing the total number of cell captives in the jurisdiction to 106. Guernsey experienced 24 surrenders during the year, resulting in a total of 305 registered captive insurers.

While demand for new structures has slowed in recent years, the island has maintained a strong standing in the formation of new captives.

Mike Johns, chairman of the Guernsey International Insurance Association and director at Willis Towers Watson in Guernsey, said in a statement that the island welcomes the figures as confirmation of the Guernsey industry's belief that demand for captives is rising.

He also said that the Guernsey industry has benefited from a fresh interest in captives, due to a change in market conditions, and the confidence gained in Guernsey's whitelisting for economic substance from the European Union, a position that some rival jurisdictions failed to secure.

Guernsey is responsible for more than a third of the European captive insurance market, according to the statement.

Risks underwritten by Guernsey captive insurers include employee benefits, employers' liability, marine and aviation risks, and terrorism.

"Some companies last year found they were facing rate increases for the first time in many years, an indication of the end of the long soft market," said Dominic Wheatley, chief executive of Guernsey Finance.

"I said at the end of 2018 that 2019 would be time to look again at captive programmes, and that proved to be the case."

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