The Cayman Islands is poised for “another banner year of growth” in its re/insurance sector, according to the Insurance Managers Association of Cayman (IMAC), with 16 new insurance and reinsurance company licences issued in 2019 to date.
In addition to the 16 new licences, the Cayman Compass reported that four portfolio insurance companies (PICs) have been registered and five new reinsurer licence applications have been approved in principle by the Cayman Islands Monetary Authority (CIMA).
CIMA issued a total of 33 new re/insurance licences in 2018, marking a solid year of growth for the sector.
“What we are seeing is positive,” IMAC chair Erin Brosnihan told the Cayman Compass. “We are confident of two distinct trends.”
“First, the largest and most complex captives are most definitely Cayman’s area of speciality, and second, we are witnessing an upsurge in new risk areas, showcasing the expertise of our managers, service providers and our regulator,” she explained.
IMAC said that businesses were increasingly turning to captives as an alternative to insurance in the commercial market, due in part to the potential for significant dividend payments that would normally have been paid as premiums to commercial insurers
The Cayman Islands currently has 120 group captives totalling more than $3 billion in premiums from over 5,000 shareholder-insureds, according to the Cayman Compass.
However, the total number of international captives and reinsurance businesses declined to 666 in the first quarter of 2019, down from 703 at the end of 2018.
“With some historical market softening, though possibly facing some hardening of those same rates, some captives have come to the end of their natural life cycles,” Brosnihan noted.
“Mergers and consolidations continue, particularly in the healthcare space, where the Cayman Islands has dominated for decades,” she continued.
“As a mature industry, it is only natural that some captives will run their course. Based on our Q1 numbers, it is clear that growth and evolution continues apace with new formations.”
The majority of the Cayman Islands industry (90%) consists of insuring risks in North America, the Cayman Compass reported, with medical malpractice liability as the largest primary line of business, followed by worker’s compensation.
