Cayman Islands Begin To Count The Cost Of Hurricane Ivan

by Amanda Banks, Tax-News.com, London

15 September 2004

Residents of the Cayman Islands are beginning the slow process of recovery and reconstruction after the islands that make up the Caribbean territory took the full force of one of the strongest recorded storm to strike in the region.

Ivan, which has claimed dozens of lives on its path across the Caribbean Sea, caused extensive damage to both property and communications systems in the Cayman Islands as winds of up to 200mph were unleashed on the islanders.

Some 15,000 houses are said to have suffered significant damage and local reports have indicated that 95% of homes there have sustained roof damage. One quarter of Grand Cayman was reportedly under water earlier in the week.

The electricity supply and telephone system have also been put largely out of action, causing unavoidable and inevitable disruption to the economic life of the islands. Cayman is the largest offshore banking centre in the world with approximately 600 banks and deposits worth $500 billion; the second largest captive insurance base after Bermuda, with assets worth $11 billion; and a sizeable trust sector thought to manage approximately $450 billion. A large proportion of the world’s hedge funds are also domiciled in Cayman.

However, investors are unlikely to be unduly affected by the disruption as the day to day trading activities of hedge funds are mostly carried out in other locations around the world.

Nevertheless, it is hard to asses at this time the impact the storm will have on the back office, accounting and legal functions carried out in the jurisdiction, although Cayman Islands Bankers Association President Eduardo D'Angelo Silva has assured that most of the large banks have backup plans, enabling them to continue servicing their customers from other jurisdictions.

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