GUERNSEY: OFFSHORE BUSINESS SECTORS

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The UK's three IOFCs, Jersey, Guernsey and the Isle of Man have each developed some specialisations; Guernsey stands out as a captive insurance centre, but also has substantial banking and trust management sectors. Like the other two 'British' IOFCs, Guernsey has extremely strong professional services and pays great attention to regulatory standards. As a rather broad generalisation, the business environment in Guernsey has shown a marked tendency to become more international, partly because of the usefulness of the island to multinationals setting up in the EU, and partly because of increasingly tough anti-avoidance rules that have made it difficult for UK citizens to make productive use of trusts.

This section of the site describes the most important types of offshore business activity carried out from the island.

Guernsey Trade Marketing and Distribution

Even more than Jersey, its competitor and companion, Guernsey is prevented by its small size and limited resources from acting as a base for physical warehousing, processing or distribution into the vast EU market that lies so temptingly close by. Financial services have understandably tended to dominate the island's business development in the last 30 years. Given the level of sophistication of Guernsey's business infrastructure, this could be seen as wasteful, and it may be that the Internet is about to make it possible for the island to develop a new life as a commercial entrepot.

Along with other offshore jurisdictions, Guernsey is a suitable place in which to base e-commerce services for retail or wholesale distribution of material or non-material goods: see Offshore-e-com.com for extended descriptions of how such businesses can take advantage of the combination of offshore and e-commerce.

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Class A schemes are those which meet the Commission's Collective Investment Schemes Rules 2002 and are therefore eligible for recognition by the UK Financial Services Authority for sale to the public in the United Kingdom under section 270 of the Financial Services and Markets Act 2000.

The rules for Class B schemes incorporate a measure of flexibility. This policy recognises that Class B schemes range from the retail fund aimed at the "general public" via institutional funds to the strictly private fund established solely as a vehicle for investment by a single institution. Their investment objectives and risk profiles are similarly wide-ranging.

The Class Q Rules seek to provide a clear and concise set of requirements for the operation of professional investor funds and have been designed to encourage innovation.

A Qualifying Investor Fund (QIF) regime was Introduced following consultation with the financial services industry in the latter half of 2004, and was welcomed by the island's fund industry. Under a streamlined application process, the Commission undertakes to grant fund approval within 3 working days provided that an appropriately licensed Guernsey applicant has certified that: the fund will be restricted to professional, experienced and knowledgeable investors; the applicant has conducted due diligence on the promoter and associated parties and has found them to be fit and proper; and the applicant is satisfied as to the fund's economic rationale and the disclosure of any risks associated with the investment vehicle.

New criteria for Qualifying Investor Funds released by the Guernsey Financial Services Commission in 2006 met with support from the island’s finance industry.

Chief executive of GuernseyFinance, Peter Niven, suggested that the move "will serve to bring more business to the island", whilst Chairman of the Guernsey Investment Fund Association, Mike de Haaff, announced that:

"GIFA welcomes the change in criteria as it brings Guernsey in line with other offshore jurisdictions. The change in definition of a professional investor will encourage more take up of QIFs and can only be seen a positive move for the island’s fund industry."

Under the new rules, the definition of Professional Investor has been widened to include an individual investor who invests a minimum of USD100,000 in such a fund.

The revised guidance note issued by the FSC also re-emphasised the due diligence obligations which Guernsey Licensees undertake when submitting applications for Guernsey Qualifying Investor Funds.

Guernsey Finance has announced that funds managed in the bailiwick of Guernsey fell by 0.5% in the final quarter of last year to GBP200.4bn; overall funds under management increased 12.5% (GBP22.2bn) during 2008.

Peter Niven, Chief Executive of Guernsey Finance said: “Global market conditions meant it was inevitable that we would see an overall reduction in the value of our business during the fourth quarter. We were fortunate that it was only a decrease of 0.5% and this demonstrates the resilience of our funds sector but clearly there will be further falls until market confidence returns, which is unlikely to be before the end of 2009.”

Mr Niven added: “We may have seen an overall decrease in asset values but in fact looking more closely you can see that there is continued growth in the closed-ended sector. This is where the principal strength of our business is now and the area that we are most heavily marketing and promoting Guernsey as a funds jurisdiction.”

End of year figures for 2009 show that the value of investment funds in Guernsey increased by GBP2.7bn (1.5%) during the final three months of the year.

The second successive quarter of growth takes the total value of funds business in the island to GBP184.2bn as of the end of December 2009. Despite late growth, over the full calendar year, total funds business declined by GBP16.2bn (8.1%) from end-2008.

“We can continue to be cautiously optimistic about our funds sector,” said Peter Niven of Guernsey Finance. “Although we have seen overall business decline by some 8% during the last calendar year, it must be remembered that this comes in the wake of a severe global financial crisis.”

“Our performance has outstripped some of our closest competitors and the fact that we have had two consecutive quarters of growth to the end of the year points again to a slow climb out of the general trough of 2008/9.”

“Our funds industry is proving robust throughout changing economic conditions and this final quarter of growth represents a positive move forward. It is another step down a long road to recovery but with increasing confidence in the markets, we hope that this will continue through 2010.”

Guernsey domiciled closed-ended funds reached a net asset value of GBP85.4bn at the end of December, which was a rise of GBP4.3bn (5.3%) during the quarter but a decline of GBP6.1bn (6.7%) year on year.

The Guernsey open-ended sector was valued at GBP50.7bn by the end of the year – down GBP800mn (1.4%) during the final three months of 2009 and falling GBP12.9bn (20.3%) compared to twelve months previously.

Non-Guernsey schemes, where some aspect of management, administration or custody is carried out in the island, decreased by GBP800mn (1.6%) during quarter three to GBP48.1bn although this is GBP2.8bn (6.2%) higher than the value at the end of December 2008.

The figures issued also show that the gross asset value of all Guernsey funds reached GBP220.7bn at the end of December. This is a rise of GBP3.5bn (1.5%) from the end of September, which was the second quarter for reporting those gross figures.

The growing use of Guernsey structures as vehicles for hedge funds has highlighted a number of areas where the investment fund framework can create problems, leading the GFSC to issue a consultation document: ‘The regulatory framework for Hedge Funds in Guernsey’ in November 2003. This culminated in a report issued in the latter half of 2004 which advocated more flexibility in certain aspects of the legal regime governing funds, including: dispensing with the need for a Guernsey-domiciled and licensed custodian to fill the role of a suitably qualified prime broker; waiving complex segregation requirements for prime brokers holding fund assets; waivers for funds which can demonstrate a need to use estimates of net asset value in advance of final NAV determination; and where estimation is permitted, a possible waiver of client money rules requiring segregation of subscription and redemption monies.

The GFSC has also recently issued guidance on the disclosure regime for closed-end investment funds. That guidance re-emphasised the flexible nature of the Commission’s approach. Guernsey domiciled closed-end funds are subject to Guernsey company law and the Control of Borrowing regime, and it is clear, from the closed-end hedge funds already established under those arrangements, that few structural problems arise. In the open-ended sector, the position is more complex. Open-ended funds are subject to the Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended, (“POI”) and to rules and regulations made under that law. POI provides, inter alia, that all Guernsey open-ended funds must be authorised by the Commission - there is no provision for “unauthorised” funds – and that each fund must have a designated manager and a designated trustee or custodian.

Plans were announced in mid-2006 to dramatically change the legislation and regulation relating to investment and fund business in Guernsey.

The proposed changes include:

Peter Niven, the chief executive of GuernseyFinance, observed at the time that:

“Guernsey’s fund business is at an all time high, with year-on-year growth in funds under management and administration of 47.4% to the end of March 2006. The timing of these recommendations could not be better to capitalise on this result and pave the way for further success.”

He continued: “Guernsey’s growth in investment business had been partly down to an increasing appetite for alternatives, in particular fund of hedge funds, property funds and private equity funds. Guernsey had also attracted a number of alternative fund managers to relocate to the island in recent years. In addition, traditional sources of new business are continuing to come through very positively."

In 2008 the island made several legislative amendments related to funds business and introduced a new set of fund rules. The main result is that now both Guernsey open and closed-ended funds can be established as authorised or registered funds. Authorised funds are regulated by the Guernsey Financial Services Commission and subject to closer supervision than registered schemes, which are not authorised by the GFSC.

Guernsey’s position as a jurisdiction of choice for new and innovative funds was strengthened in November 2009 with the launch of a new scheme that invests in the collectables market, according to Guernsey Finance, the jurisdiction's investment promotion body.

Launched by investment advisory boutique Emotional Assets Management & Research LLP (EAMR), the Guernsey-domiciled ‘Emotional Assets Fund 1 Limited’, invests in a diversified set of ‘Emotional Assets’ across some 15 sectors of the collectables market, from fine art and rare stamps to vintage jewellery and rare manuscripts.

It is the first time that exposure to a broad and diversified range of 'emotional assets' has been achievable via a single fund vehicle.

Kleinwort Benson has been appointed as the administrator and financial custodian of the Guernsey Closed-Ended Authorised Fund, with Bedell Cristin as the Guernsey legal advisor.

The Emotional Assets Fund 1 seeks to provide qualified investors with long-term capital appreciation. Its objective is to deliver a stable target growth rate of 15% per annum, with predictable volatility – at the same time preserving capital.

Bernard Duffy, Managing Director of EAMR, commented at the time that: “We chose to domicile the fund in Guernsey as it is such a user-friendly jurisdiction; it has robust legal system, a favourable tax neutral regime and excellent on-island administrators. Kleinwort Benson has a good reputation within the alternatives market, with specific experience in alternative asset classes, and has a hands-on approach to bringing on clients which helps the whole process."

He added: “At a time when conventional investment wisdom is being challenged and investors are questioning the investment merits of a range of assets, Emotional Assets are emerging as a viable and mainstream asset class.”

In the following month, Guernsey Finance announced the launch by HSBC Securities Services in Guernsey (HSSG) of a major, high profile fund worth USD1.5bn on the island.

HSSG has been chosen to provide administration services for the award-winning Tufton Oceanic Hedge Fund, managed by Oceanic Investment Management Limited.

Oceanic Investment Management is a subsidiary of Tufton Oceanic, a shipping investment house which focuses investment in shipping and oil services industries.

Paul Keltie, Head of Fund Administration for HSSG, said at the time that:

“This is great news, not only for HSSG, but for Guernsey as a whole. This deal brings new investment to the island, which can only be of benefit to our economy and community."

"It clearly demonstrates that we have the capability and talent in Guernsey to provide leading and innovative service solutions to support such truly alternative funds.”

A spokesman from Tufton Oceanic added: “We transferred the administration of the Fund to HSSG because of their ability to provide leading offshore administration services. We are confident that the Group will deliver us the best administrative support, to compliment our continuing growth strategy.”

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Guernsey Banking

Banks in Guernsey are regulated and licensed by the Guernsey Financial Services Commission (GFSC) under the Banking Supervision (Guernsey) Law 1994 as amended. The Commission is extremely careful to exclude doubtful operations.

Originally, banks coming to Guernsey set up fully-staffed local branch offices or subsidiaries, but in recent years, as in many other IOFCs, in response to shortage of resources, the administered unit has become more popular. Under this scheme, an established Guernsey bank provides services for an incoming bank, which therefore does not need to open its own office or recruit staff. However, the Financial Services Commission applies the same standards of supervision to an administered bank as to an established bank. About one third of the banks in Guernsey are 'administered'.

The banking sector, in common with other financial services businesses, is subject to stiff money laundering controls under the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Regulations, 2002.

Financial services businesses which suspect that a customer or transaction are associated with money laundering, terrorism, or the financing of terrorism, must report this to the Guernsey Financial Intelligence Service.

There are 42 licensed banking institutions in Guernsey (2010).

Guernsey’s banking sector is in a more positive position than the continuing decline in deposit levels might suggest, according the head of the promotional agency for the Island’s finance industry.

Figures from the Guernsey Financial Services Commission (GFSC) show that the value of Guernsey bank deposits fell by 2.3% during the final quarter of 2009. This took the total value of deposits to GBP177.4bn at the end of December 2009 – a 25.2% decrease from twelve months previously.

However, Peter Niven of Guernsey Finance, believes that the sector is better placed than the top-level analysis initially seems to indicate:

“What we can see is that a year ago the global financial downturn and an associated flight to quality were pushing deposit figures to a peak. Since then, there has been a decline in the deposit base as a result of returning confidence within the investor markets coupled with a very low interest rate environment.”

“Indeed, it is within this context that we have seen a consistent fall of Swiss fiduciary deposits in particular. The performance of this one product, especially more recently, has been driving the decline in overall deposits and in fact, has to some extent been masking wider improvements in the sector. For example, within this last quarter of 2009, other deposits – excluding Swiss fiduciary deposits – actually increased in value albeit only slightly.”

“Therefore, the picture is more positive than it might first appear and in fact what we have seen during the last two quarters is increased stability of deposit levels which now sit at more sustainable levels.”

Analysis of the figures from the final quarter of 2009 shows that the main reason for the fall in deposits was the continued contraction of Swiss fiduciary deposits, down from GBP44.8bn at the end of September 2009 to GBP41.8bn at the end of December 2009.

In addition, other deposits – excluding Swiss fiduciary deposits – increased slightly from GBP75.3bn at the end of September 2009 to GBP75.6bn at the end of December 2009.

The reported total deposit figures were impacted to some extent by the strengthening of sterling against the major currencies. This exchange rate effect also led to some differences in the overall currency mix with sterling deposits increasing to 23.9%, Swiss Franc deposits up to 3.8%, US Dollars stable at 46.3% and Euros decreasing to 23.3%.

Speculation that the EU Savings Tax Directive would impact on balances held offshore has so far proved unfounded.

In November 200, Guernsey’s Commerce and Employment Department welcomed the publication of a strategic review of the island’s banking sector, commissioned in March 2009, which provides proposals to ensure the sector’s sustainability, as well as drawing on lessons from the economic crisis.

Investigations and interviews were undertaken by a team headed by Lord Hunt of Wirral, Chairman of the Financial Services Division of Beachcroft LLP.

Lord Hunt stated that he found much to encourage him in thinking that Guernsey could expect a major contribution to its economy from banking in years to come; a message that he reiterated when presenting the report:

“The banking sector has made a significant net contribution to the economy of Guernsey. The report shows that the sector directly employs nearly 2,750 people and contributes 17% of all tax revenues and an estimated GBP200m a year to the Guernsey economy,” he revealed.

The independent study highlighted that there were definitely opportunities to be researched and potentially exploited by the Guernsey banking sector, but it warned that the Island could not afford to be complacent.

The report highlighted threats and risks to be mitigated as well as opportunities, both of which must be addressed by the public and private sector in order to remain competitive.

Carla McNulty Bauer, Minister for Commerce and Employment, observed that:

“Hunt’s report shows that Guernsey has a strong and diverse banking sector which is crucial to Guernsey’s whole population."

"Many of the proposals are already being addressed and I look forward to continuing to focus our collective attention on the areas highlighted in the report so that Guernsey continues to have a banking sector with an enviable reputation.”

She continued: “The announcement that Guernsey must once again review its corporate tax structure only reinforces the points raised by Hunt. Opportunities and threats will continue and Guernsey has to continue to be dynamic and work hard to maintain competitive advantages in an international arena. This will be a collaborative effort by the public and private sector.”

The report highlights the fact that Guernsey’s success as an attractive place for people to live and do business is inextricably linked with the banking industry.

Lord Hunt suggested in this regard that “the disproportionate contribution from banking makes its success and closely related activities a key driver of Guernsey’s prosperity”.

In addition to providing traditional banking services to the local domestic and business community, it was identified that most Guernsey banks offer core products to all other parts of the finance sector, and that this also adds to Guernsey’s infrastructure and general offering.

Steve Watts, Chairman of the Association of Guernsey Banks (AGB), observed that: “The Hunt Report has again emphasized that banks are a vital part of the whole Guernsey economy. AGB notes the recommendations contained therein, acknowledges that the banking industry is undergoing change on a global scale and that it is vital for the island to continue to maintain its well established reputation for probity, effective regulation and transparency.”

The deposit-taking sector was scrutinized, and the report concluded that although the risk presented by retail deposits is less than a year ago, risk remained which needed to be considered and managed.

Philip Marr, Director of Banking at the Guernsey Financial services Commission (GFSC), commented: “Hunt’s Report on the current shape of the banking industry in Guernsey and his analysis of the principal business models operating here and the risks inherent in those models will be helpful to all stakeholders involved in the industry. We think it is wholly appropriate to consider whether those are reasonable risks for the island to be taking in the current environment. We have already been addressing those risks, principally about upstreaming, for some time and will continue to do so in the future.”

“Hunt also addresses the challenges facing the sector as a result of regulatory changes brought on by the banking crisis. As always we stand ready to respond to those challenges which impact on banking business in Guernsey.”

The Hunt review is the culmination of significant work both on and off-Island, including a three month consultation period with stakeholders and interviews from Guernsey’s banking sector; formal information and data gathering exercises; and comprehensive canvassing of views of international banking experts.

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Guernsey Trust Management

Trust management, particularly for wealthy UK individuals, was the island's traditional business. Successive tightenings of UK anti-avoidance legislation have reduced the possibilities for UK citizens, but Guernsey's trust business has continued to grow based on a more international clientele. Many Collective Investment Funds are also of course based on trusts.

As of February 2008, the Island hosted more than 140 licensed fiduciaries, ranging from large organisations to independent, boutique operations. Together, they held between GBP200 and GBP300bn worth of assets in trust. The island has a very well-developed legal and financial infrastructure for trust management; the highly sophisticated professional services which support the trust sector include lawyers, accountants, investment managers and stockbrokers.

The Trusts Law 1989 (updated in 2007) provides a modern statutory basis for trust management activity. The Edwards Report acknowledged that Guernsey ranks highly among IOFCs for the quality of its regulation. Unlike the banking sector, however, the Guernsey trusts industry had not been subject to any formal system of supervision. Partly as a result of the Edwards Report, a law was prepared by the States' Advisory and Finance Committee under the name of The Regulation of Fiduciaries and Administration Businesses (Bailiwick of Guernsey) Bill 2000. The law - known as the Fiduciary Law - came into effect on April 1, 2001.

Individuals and businesses involved in the provision of fiduciary services had to submit a licence application to the Commission by May 31, 2001. The Commission received a total of 179 applications for a full fiduciary licence and 70 applications for a personal fiduciary licence.

The law contains a 'four eyes' rule, standards for capital adequacy and compulsory indemnity insurance. The offer or provision of fiduciary services without a licence will incur criminal sanctions. A full licence is required by any company, wherever registered, providing fiduciary services in the Bailiwick and by Guernsey-registered companies providing fiduciary services anywhere in the world and individuals, acting as directors or trustees by way of business, need a personal licence. Prudential rules have also been imposed; clients' funds need to be segregated from other trust assets; and new accounting safeguards have been installed.

The annual fee for a full fiduciary licence is dependent upon the annual turnover from regulated fiduciary activities. See Offshore Legal and Taxation Regime for full details.

The law provides extensive powers to the GFSC in the granting, refusal, revocation, and application of conditions to fiduciary licences. It will also have authority to control the names of, and advertising by, fiduciary businesses, rights to obtain information and documents, and powers to conduct investigations. The Commission states that the Bailiwick of Guernsey is one of the first jurisdictions to establish a statutory system of fiduciary regulation.

New trust legislation (the Trusts (Guernsey) Law, 2007), which was approved in July 2007, came into force on March 17th, 2008. The changes overall are designed to create a more flexible framework for the local trust industry, and to ensure that Guernsey, as a jurisdiction for the establishment and administration of fiduciary structures, remains well placed and competitive. See Law of Offshore for a fuller description of the 2007 legislation.

Click on Formation of Trusts or Taxation of Trusts for further information.

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Guernsey Insurance

See Offshore Business Review – Insurance for a more general treatment of captive insurance companies.

The Guernsey insurance sector can be broadly divided into two main areas: domestic insurance - comprising local insurers, overseas insurers, recognised insurers and intermediaries who advise on or arrange contracts of insurance in or from within Guernsey; and international insurance - embracing captive insurers, protected cell companies and life assurance companies who arrange contracts of insurance from within Guernsey, covering international risks.

Access to protected cell status was enlarged in 2001 under The Protected Cell Companies (Special Purpose Vehicle) Regulations 2001, under which two further classes of company were permitted to be incorporated as, or converted into, a protected cell company. The first additional class of company is one that is "established principally for the purpose of issuing bonds or other debt securities where the repayment is to be funded from the proceeds of the company's investments." The second type of company is one that performs the "carrying on of finance business" with the exception of those supervised under specific laws such as the Protection of Investors Law, the Insurance Business Law, the Banking Supervision Law and the Regulation of Fiduciaries. The law took full effect from 6 February 2001.

Both categories of insurers in Guernsey are required to be licensed under The Insurance Business (Bailiwick of Guernsey) Law, 2002.

A survey conducted by Reactions Magazine in June, 2006, saw Guernsey voted the best domicile in Europe for PCC (Protected Cell Company) legislation, highly commended for its tailored legislation, and commended for its cost efficiency.

According to GuernseyFinance, the survey comes at a time when the growth in numbers of Captive Insurance companies slowed globally in 2005.

Peter Niven Chief Executive of GuernseyFinance commented:

“These accolades show the insurance industry recognizes Guernsey as a leading domicile for Captive Insurance and particularly for PCCs. This is set to continue with our pragmatic approach to legislation and our continuing drive to ensure that Guernsey is a good place to do business.”

Captives in Guernsey can choose between various tax regimes; see Offshore Legal and Tax Regimes: Taxation of Offshore Entities and Domestic Corporate Taxation for details.

In the domestic market, there were 16 domestic insurers as at April 30, 2010, and 39 registered intermediaries. In addition, a number of 'Recognised Insurers' write business in Guernsey without having a physical presence. A recognised insurer cannot write business in the Bailiwick without being licensed in their home jurisdiction.

Registered insurance companies may take advantage of the Protected Cell (Guernsey) Ordinance 1997, under which multiple cells may exist within one company; the taxation basis of protected cell companies will probably be equivalent to that of exempt companies. Protected cell company status under the 1997 Ordinance is generally reserved for authorised collective investment schemes, insurance companies and closed-ended investment companies.

Two studies released in 2010 have reaffirmed Guernsey’s position as the leading captive insurance centre in Europe, and among the top four in the world.

Previously undertaken research has shown that Guernsey is home to more captive insurance companies than anywhere else in Europe and the fourth largest player in the world. This position has been endorsed by a new survey from weekly trade publication Business Insurance, while research from monthly insurance title Captive Review ranked Guernsey first in Europe and third globally.

Commenting, Peter Niven, Chief Executive of Guernsey Finance, said: “This is extremely positive news. We have built a reputation for expertise and innovation, but it also shows that there is strong competition so we cannot rest on our laurels.”

The Business Insurance rankings are based on the number of licensed captives at the end of 2009.

Leading the way is Bermuda (885), followed by the Cayman Islands (780), Vermont (560), then Guernsey (355) with the British Virgin Islands (285) completing the top five in the world. The second of the European jurisdictions – and sixth in the world – is Luxembourg (251), followed by the Isle of Man (145), Dublin (114), Switzerland (42), Gibraltar (17), Malta (9) and Jersey (3).

The Business Insurance research also shows that Aon Insurance Managers in Guernsey was the third largest manager by domicile, with 214 captives at the end of 2008. At the head of the field were Marsh-Captive Solutions in Bermuda (473) and then Aon Insurance Managers in Bermuda (252).

The Captive Review rankings are based on the full range of international insurance entities, including Protected Cell Companies (PCCs), Incorporated Cell Companies (ICCs) and their related cells. In addition, it takes into account the captive premium and assets under management within the captives. As a result of the different methodology, Captive Review maintains the same top five but places Guernsey in third and Vermont in fourth.

Captive Review findings says: “Guernsey is the undisputed king of the cell captive world. It may not have the most but it introduced both the protected cell company (PCC) and incorporated cell company (ICC) concepts to the world and set the template for other jurisdictions to copy.”

“It’s therefore a toss-up for third place in the global domicile listings between Guernsey and Vermont. Vermont undoubtedly has the greater number of single-parent, group and other large captive structures but… it is exceeded by Guernsey in sheer captive numbers by the latter’s volume of cells. Vermont writes more captive premium but Guernsey’s captives have a greater asset value.”

The number of insurance licenses issued in Guernsey in 2009 was almost 25% more than during 2008, according to figures released by the GFSC.

The figures show that 46 insurance licenses were issued during 2009, compared to 37 in 2008.

“It is very positive that we are attracting increasing amounts of new insurance business to the Island and thereby retaining our position as the leading captive insurance domicile in Europe and number four in the world,” said Peter Niven, Chief Executive of Guernsey Finance.

“What we are seeing is that business introducers are continuing to recognize Guernsey as a captive domicile offering real quality in terms of service providers and professional advisors, robust yet pragmatic regulation and high standards of corporate governance.”

The GFSC statistics show that Guernsey now plays host to a total of 678 international insurance entities. This comprises 355 international insurers – made up of 281 traditional captives, 63 PCCs, 5 ICCs and 6 ICC cells. There are also 323 PCC cells, split between 250 conventional PCC cells and 73 PCC cells writing life insurance.

The Island’s insurance sector has seen the value of business increase markedly over the last five years. In 2003, the industry had gross assets of GBP13bn (USD21bn), a net worth of GBP5.3bn and premiums of GBP2.5bn. Now there are gross assets of GBP21bn, a net worth of GBP7.1bn, and premium written of GBP3.3bn.

“While last year did see growth in new business coming to the Island, unfortunately we also had some licenses surrendered – in particular a number of cells reached the end of their insurance programs. However, the figures do show that irrespective of the number of licensed entities, we are seeing consistent and sustained growth in the value of the Island’s insurance sector business. It is clear that Guernsey continues to be recognized as a leading international insurance center,” Niven concluded.

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