Cayman Islands See Continued Growth In Captive Insurance Sector

by Amanda Banks, Tax-News.com, London

08 March 2006

Cayman's captive insurance sector continued to grow in 2005, with 733 Cayman-licensed captives active at 31 December, according to latest figures from the Cayman Islands Monetary Authority (CIMA).

This represents a six percent increase from December 2004, when 693 captives were active. During 2005, CIMA licensed 59 new captives, while 19 were cancelled.

Total assets of the 733 captives active at year end 2005 amounted to US$26.6 billion. Premiums written by these entities equalled US$6.7 billion

North America was the region of origin and the location of risk for the vast majority of licensees. Eighty-eight percent of licensees (646) were providing cover in North America, writing premiums amounting to US$5.6 billion.

This was followed by the Caribbean and Latin America, which made up approximately five percent of total licensees (33) with premiums amounting to US$132.4 million.

Healthcare was the primary class of business for 38 percent of Cayman-domiciled captives in 2005, with US$2.5 billion worth of premiums written in this class.

Workers compensation was the primary class of business for 21 percent of captives (155 licensees). Premiums in this category totalled US$1.5 billion.

Property was the third most popular category, with 10 percent of captives (75 companies) listing it as their primary class of business and writing US$487.5 million in premiums.

There has been a steady increase in the number of captives registered in the Caymans. At the end of 1995 there were 390 active entities. By 2000, the figure had increased to 516.

CIMA's Deputy Head of Insurance, Morag Nicol attributed this trend to the domicile's "strong and established regulatory framework, solid infrastructure, experienced service providers and an ongoing commitment to maintaining business excellence".

Mrs Nicol added that the outlook for Cayman's captive sector in 2006 is "positive", and she noted that there has been "continued interest in Cayman as the domicile of choice".

Also in 2005, the Cayman Islands witnessed the formation of an open market reinsurer, Greenlight Re with approximately US$250 million in capital.

"Greenlight Re is the first Cayman-based global property and casualty reinsurance company and has worldwide reach, specializing in custom tailored reinsurance solutions. We anticipate that during 2006 interest in utilising Cayman as a domicile for such vehicles will continue," observed Mrs Nicol.

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