The latest insurance sector licensing statistics released by the Cayman Islands Monetary Authority (CIMA) have shown continued international interest in the captive insurance industry, which has maintained its extremely strong position.
According to data for Q3 2023, CIMA issued eight new insurance company licenses between July and September, which kept pace with the growth seen in both the first and second quarter of this year. Five Class B(i) licenses were issued during Q3, alongside three Class B(iii) and one new Portfolio Insurance Company.
On a year-to-date basis, the overall total of new international licenses issued by CIMA for 2023 stands at 24 for the first nine months. Considering the fourth quarter is traditionally a busy period for new licensing activity and the majority of Cayman insurance managers continue to report healthy new business pipelines, this activity points to another buoyant year for the jurisdiction, which has consistently added more than 30 new international insurance licenses in each of the last seven years.
With the addition of these new licensees, as at Q3 2023, there are 679 Class B, C and D insurance companies licensed in the Cayman Islands, writing approximately US$57billion in premiums and with total assets of US$137 billion. These numbers are consistent with Cayman’s position as the second largest captive insurance domicile globally and have increased significantly in the past two years, notably with premiums up from US$23 billion and assets rising from US$75 billion in 2021.
Licensing activity in 2023 has also included five new portfolio insurers and one Class D open market reinsurer. Cayman’s modern Portfolio Insurance Company legislation allows insurance companies established as Segregated Portfolio Companies to incorporate cells as Portfolio Insurance Companies, which has been a highly popular way for industry participants to enhance risk management. The reinsurance sector has also developed into a significant part of Cayman’s international insurance business in recent years and there are currently eight Class D licensed reinsurance companies, compared to three in 2017.
North America continues to be the dominant risk location for the Cayman Islands international insurance industry, accounting for 90% of the total in Q3 2023. Medical malpractice liability, workers compensation, general liability and property remain the most significant lines of business, together making up almost 70% of licensees.
“Thanks, in part, to CIMA’s excellent proportional regulatory approach, the Cayman Islands insurance industry is experiencing continued growth across sectors, with established companies expanding their portfolios and group captives welcoming new members,” said Lesley Thompson, chairperson of IMAC. “These healthy third quarter statistics signal the likelihood of a strong finish to the year and we expect to see increases in license applications and double-digit license issuances in Q4.”
IMAC encourages anyone who would like to learn more about Cayman Islands captives to register for this year’s Cayman Captive Forum being held at the Ritz Carlton from the 28th to 30th November. If in-person attendance is not possible, IMAC has the option of online content available for a nominal $100 registration fee.
The Insurance Managers Association of Cayman (IMAC) represents the international insurance industry in the Cayman Islands. IMAC liaises with government and the regulator on the industry’s behalf and promotes innovation and international competitiveness to maintain Cayman’s advantageous market position. The Cayman Islands is the second largest domicile in the world for captives and a dominant jurisdiction for healthcare captives, group captives, catastrophe bonds and international reinsurance.
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