The Cayman Islands Monetary Authority has issued 16 new insurance and reinsurance company licences in 2019 to date.
In addition, four portfolio insurance companies (PICs) have been registered and five new reinsurer licence applications have been approved in principle by CIMA so far this year.
This sets the jurisdiction’s international insurance industry up “for another banner year of growth”, the Insurance Managers Association of Cayman commented.
“What we are seeing is positive,” said IMAC chair Erin Brosnihan. “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.”
Growth was particularly pronounced in group captives, digital assets and reinsurance.
IMAC said businesses were increasingly turning to captives as a viable 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. Businesses of all sizes and across industries are benefiting from captives through the increased accessibility of the group captive model, the association said.
The Cayman Islands remains one of the world’s leading group captive jurisdictions with 120 group captives totalling more than $3 billion in premiums from over 5,000 shareholder-insureds.
Total premiums recorded for the quarter are US$15.4 billion and total assets came in at US$68.95 billion, each area showing consistent increases since year-end 2018, IMAC said.
However, the total number of international captives and reinsurance businesses declined to 666 in the first quarter of the year, down from 703 at the end of 2018.
Brosnihan said the overall drop in international insurance companies was expected.
“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,” she said. “Mergers and consolidations continue, particularly in the healthcare space, where the Cayman Islands has dominated for decades. 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 IMAC chair added.
Approximately 90% of the industry consists of insuring risks in North America. Medical malpractice liability remains the largest primary line of business with approximately 33% of companies insuring or reinsuring MedMal, followed by worker’s compensation with 22% of companies assuming this type of risk.
Members of the Cayman Islands’ international insurance industry, including Ruwan Jayasekera, head of Insurance Supervision at the Cayman Islands Monetary Authority, will be attending the RIMS 2019 risk management conference in Boston from April 28 to May 2 to promote the benefits of Cayman Islands-domiciled captives.