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Guernsey’s position as a leading centre for Insurance Linked Securities transactions was underlined at a thought leadership event in London last Wednesday.
Hosted by Guernsey Finance, ‘ILS Insight London’ attracted more than 140 delegates and featured two panel sessions with ILS experts from Guernsey, the UK and mainland Europe sharing their expertise and insights into this fast developing asset class.
Dominic Wheatley, Chief Executive of Guernsey Finance – the promotional agency for the Island’s finance industry, said the event was particularly timely as it coincided with the announcement by George Osborne, the UK Chancellor, that the UK was committed to developing its own ILS regime.
“I believe the event demonstrated how Guernsey has established itself as a major destination for ILS business and that what sets it apart from other jurisdictions is its ability to innovate and to develop the technology that underpins the sector, rather than simply going after a large volume of transactions. Guernsey can boast a diverse range of transactions and risks across its ILS sector, including the reinsurance of satellites, lottery risk, football clubs and players and marine reinsurance. The Island’s focus does not just revolve around traditional catastrophe risks,” said Mr Wheatley.
“The fact that the UK has expressed an interest in ILS shows just how attractive the market is and we will watch those developments closely. What Guernsey has to its advantage is its long-established record in the industry and proven track record of constantly evolving and innovating its offering in response to market demand and the international environment. Examples include the introduction of the Guernsey-pioneered Protected Cell Companies and Incorporated Cell Companies, which are commonly used for ILS structuring, while the recent release of guidance notes on the formation and management of insurance and reinsurance special purpose vehicles in Guernsey has further reinforced our position in the sector.”
The event’s first panel session focused on structural innovation, with a particular emphasis on the effects of cross-border regulations and structuring opportunities. Moderated by Kate Storey of Appleby, the panel consisted of Christopher Bell of GBF Legal; Mark Helyar of Bedell Cristin; Nick Bugler of Wilkie Farr & Gallagher LLP; and Caroline Bradley from the Guernsey Financial Services Commission.
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The second panel session looked at Guernsey as an ILS jurisdiction and its continued growth in collateralised reinsurance, longevity risk and the use of cat bonds. Moderated by Clive James of Kane, the panel consisted of Justin Wallen of Robus; Stewart McLaughlin of Willis; John Rowson of Aon; Martin Bird of Aon Hewitt; and Ben Canagaretna of Barbican.
Elizabeth Westwood, Senior Relationship Manager at BNY Mellon, was one of those in attendance at the British Museum who appreciated the insight of the panellists.
“From a service provider's perspective, there was discussion about transactions that we have been involved in or had conversations about. Particularly interesting in the second panel was the range of views. Everyone agreed there is a huge market but, on the pension reviews transfer, a range of different solutions. People had experienced the same thing from different angles.”
Mark Pring, Partner at Addleshaw Goddard, was similarly impressed with the panel discussions.
“I came here to learn a lot more about the market. The first panel was superb and answered the questions very effectively, while the second panel was more technical. Very coherent, very educational – an excellent forum and a good length,” said Mr Pring.
Figures to the end of 2014 show that the Guernsey regulator licensed 85 new international insurance entities during last year, meaning there was a total of 797 international insurance entities domiciled in the Island at the end of 2014. Further data showed that ILS was responsible for 45% of new business last year.
