MULTINATIONALS are choosing to use Guernsey-based actuarial services because the island is a primary offshore finance centre. Bacon & Woodrow Channel Islands senior partner Stephen Ainsworth believes Guernsey’s location, tax structure and regulatory system make it attractive for international firms setting up pension schemes and captive insurance companies managing corporate risk.

Speaking as BWCI marked 25 years of business in Guernsey, Mr Ainsworth said that over the years the firm had also benefited from the growth of the local finance industry and the related on-island demand for actuarial services.

He is now seeking to build on the base that BWCI has built locally and further diversify the company’s operations.

‘Guernsey is a premier-division international finance centre and therefore is the location of choice for multinationals wanting to set up pension schemes and captive insurance companies managing corporate risks,’ he said.

‘It is a convenient location for clients in the UK; the tax structure is particularly helpful and the regulators are keen to help us develop our business.’

Bacon & Woodrow London set up the Guernsey office in 1979.

‘They could see a future in developing offshore pension schemes and advice to captive insurance companies,’ said Mr Ainsworth, who was part of the founding team.

‘It was exciting; we had no idea how it was going to develop. We found a small office suite in Albert House, we recruited six staff and the business has gone from there.’

Twenty-five years later, the company has grown from an office of six to almost 80 staff.

‘In pension schemes we can see significant need for a greater degree of investment strategy advice. With defined benefit pension schemes, there will be an increased need for advice on matching their assets against liabilities. For defined contribution schemes, trustees need assistance in selecting the appropriate range of funds for member choice, and pension scheme members need advice in selecting funds that best meet their retirement needs.

‘In the insurance sector, we can see an exciting future development of employee benefit captives. In the past, captive insurance companies have intended to insure the commercial risks of parents. But the new trend is to extend the scope of those captives to insuring the risk benefits of the parent company’s employee benefits schemes.’

BWCI’s initial development was aided by in-island demand for actuarial services.

‘The first major development was that we noticed demand from local businesses for actuarial work and therefore we began to serve them as well as our international business. With the finance industry growing and companies developing pension schemes for their own staff, there was therefore a growing level of business for helping local clients in the finance sector and more generally to set up and advise on their own pension schemes.’

A significant step for the company was being awarded the contract to act as actuary to the States of Guernsey superannuation fund – the pension scheme for the civil service.

In 1987 the firm converted the Guernsey branch into a separate practice from the London partnership.

‘This enabled us to diversify into new areas. We significantly developed our trusteeship and administration business for pension schemes, employee share trusts together with insurance management services for life insurance companies.

‘Like many professional practices, we diversified from advice into provision of management services, but particularly in areas where the advice we give will have added value because of our expertise in pension and insurance matters.’

In 1997 the local partners concluded a management buyout so the Channel Islands branch became fully independent, leading to the BWCI name and logo.

The company has set up offices in Jersey and improved links with other firms so it has representatives in the Isle of Man, Cyprus and Luxembourg. It has also joined the Milliman global international actuarial network as a Channel Island member.