Guernsey is home to a specialist insurance sector, providing alternative risk transfer solutions to sophisticated clients such as corporations, investment managers and pension schemes.
The origins of Guernsey’s insurance industry date back to the 18th century. The first captive insurance company was incorporated in 1922 and since then, Guernsey has become the world’s leading centre for non-US and international captive insurance. More recently, Guernsey is also increasingly recognised as a centre for reinsurance and insurance linked securities; with special purpose insurers used for catastrophe bonds, side-cars and life-based securitisation.
Guernsey’s insurance sector is pioneering and innovative, boasting a position of leadership in the structuring and execution of alternative risk transfer.
In 2017, a Guernsey-domiciled reinsurance transformer issued the first notes ever to have been digitised on the blockchain.
In 2014, a Guernsey incorporated cell company was used to undertake a £16 billion longevity risk swap on behalf of the BT Pension Scheme.
In 1997, Guernsey was the first jurisdiction to introduce cell company legislation, which has since been replicated elsewhere since.
PCCs, pioneered by Guernsey, and ICCs provide legal segregation between assets and liabilities as well as the ability to create cells that are bespoke to individual family members or asset classes.
Guernsey continues to innovate with the introduction in 2019 of the world’s first mixed-purpose PCC/ICC which is both a licensed insurance company and a regulated fund.
Guernsey has also made legislative advancements that have created a regulatory environment which allows for their flexible use. This combination of experience and creativity means Guernsey is leading the way in providing cutting edge solutions to meet clients' complex risk transfer needs.
Flexible and responsive
The island’s position of leadership in the structuring and execution of alternative risk transfer is due to the island’s flexible, responsive regulatory regime which is quicker, less prescriptive and more flexible than Solvency II or equivalent regimes.
While Guernsey observes the IAIS Core Principles - the global standard for international insurance supervision – it affords greater flexibility and responsiveness than elsewhere.
For example, Guernsey’s regime distinguishes between different classes of insurers (e.g. commercial and captive insurance companies) and places proportionate regulatory burdens on each. Further, Guernsey’s regulator maintains a discretion to modify regulatory requirements on a case-by-case basis.
The result is an environment perfect for start-ups, innovative operations and niche providers.