In the final part of a series on the Guernsey Financial Services Commission’s annual report, Tom Bradshaw looks at the insurance sector THE prospects for insurance playing an expanding role are good.

Managers indicated they were optimistic of further business opportunities during this year.

The concept of the sector is simple. It is targeted at companies that require a lot of cover, be it for members of staff or other aspects of their operation.

Its sets up and manages their own insurance companies to administer in-house policies rather than relying on outside providers.

By the end of 2006, the sector’s international market consisted of 312 insurance companies operating as either captives or commercials together with 68 protected cell companies and one incorporated cell company.

‘The large proportion of non-UK companies choosing Guernsey as the domicile for their captives demonstrates the continuing attractiveness of Guernsey as an international centre,’ said director of insurance Diane Colton.

Within the PCCs are 243 separate cells, which provide insurance in the same way as captive or commercial insurers to a wide variety of international companies and organisations.

During 2006, 51 new international insurance companies were licensed with just over half established for UK entities. The remaining parent companies come from places such as Iceland, Israel, Japan, Saudi Arabia and Switzerland.

The size of the local market remained stable last year.

Mrs Colton said that was due to its mature nature and the low level of major insured losses impacting on the world’s markets, together with a large number of mergers and acquisitions offsetting the number of new licences.

In addition to the international marketplace, the sector also provided services to the local community.

At the end of 2006, there were 48 locally licensed insurance intermediaries and 24 insurers licensed to write Guernsey-based risks for the local market.

GFSC director-general Philip Neville said it was seeking continued innovation in the types of insurance vehicles to provide more cost effective and profitable solutions.

It also continues to support initiatives to improve standards within the sector.

The Insurance Education Forum, which was set up in conjunction with the GTA University Centre and which represents a cross section of industry, meets regularly to exchange views on education and training needs.

There is also extensive dialogue between the representative bodies of the captive managers and intermediaries as well as actuaries, accountants and chartered secretaries.

On-site visits continued last year in accordance with the commission’s three-year rolling programme.