Corporate: Guernsey Win-Win with Hybrid Insurance/Investment Licence

Innovations including the introduction of 30-day rollover and the introduction of the ‘hybrid’ – a combined licensed insurance company and a regulated investment fund – have kept Guernsey high profile in the insurance-linked securities sector this year.

In 2018, ILS structures formed the majority of licence applications in Guernsey’s diverse insurance sector and outstripped the previous year. The Guernsey Financial Services Commission said that while some was repeat business, there were good flows of new business into the sector.

The island’s ILS rules proved their worth, as Guernsey structures were tested by various weather events and were proven to function well in paying claims to underlying policy holders.

“Guernsey already has a number of advantages as a domicile for ILS, including the breadth of our funds and insurance knowledge, our status outside of Solvency II, our experience and the responsiveness of our regulator,” said Dominic Wheatley, Chief Executive of Guernsey Finance.

“The GFSC is striving to achieve a balance between proper levels of security and the interests of investors, with a pragmatic, business-friendly approach that allows industry to get on with doing business, and seeks to provide a secure regulatory environment while preserving the essential business-friendly nature of Guernsey as an ILS centre.

“Guernsey is a key player in the ILS transformation market and as the asset class continues to grow Guernsey’s role in it will grow too, and I am sure we will continue to be at the forefront of innovation in the ILS sector.”

Regulatory consent to allow ILS cells to benefit from 30-day rollover provisions have been widely welcomed and attracted considerable interest from the wider ILS industry.

And the regulator’s acceptance of the new ILS hybrid, an all-in-one structure that can act as re-insurer and ILS fund, developed by Guernsey lawyer Christopher Anderson earlier this year, has also raised the profile of the sector in the island, a well-recognised centre for funds as well as insurance excellence.

Guernsey’s ILS sector again heads to Switzerland next month (Thursday 4 July) for its annual ILS Insight conference, taking place at the AURA Event Hall in Zurich. With a panel discussion and three ‘showcase’ presentations, it will cover topics including industry losses, cat loss expectations, the EU’s white-listing substance process, and London’s stake in the ILS market.

Speakers include Niklaus Hilti, Chief Executive Officer and Chief Investment Officer at Credit Suisse Insurance Linked Strategies, one of the highest-profile figures in the sector, Christopher Anderson from Carey Olsen, Colin Scagell, London-based partner at Mayer Brown, and Jason Noronha, Head of Actuarial and Analytics at Aon.

For more information on the event, visit: https://www.weareguernsey.com/finance-events/2019/ils-insight-2019/.

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