cayman captive 2019 3
CAYMAN CAPTIVE IS PUBLISHED
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EDITOR: Owen Faulkner
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Marc Jones and Christian Wuestner
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Cayman Captive – ISSN 1745-851X
Cover Image: Anna Om / iStock Photo
A steady ship in uncertain waters
As 2018 draws to a close, the captive insurance industry in the Cayman Islands
can look back at what has been a period of steady growth, mixed with interesting
developments which have the potential to shift the dynamic of the industry.
So far Cayman has issued 23 new licences in 2018, and it is expected there will be
levels of formations similar to those in 2017 and 2016.
Around 80 to 90 percent of Cayman’s international insurance business relates to risk in
North America. On top of that, around half of Cayman’s captive insurance business relates to
healthcare, whether that be medical malpractice liability or workers’ compensation.
Continued mergers and acquisitions activity as a result of the Affordable Care Act (ACA) 2010
has led to healthcare systems and US hospitals consolidating their operations, which in turn
creates greater emphasis on the controlling and minimising of costs—with captives remaining
an attractive solution.
Against this backdrop, it is hard to not to look at US President Donald Trump’s continued
clashes with the ACA in his efforts to repeal and replace the legislation. This has kept the
issue of healthcare uncertain, and therefore the future of the healthcare captives market, with
Cayman watching closely for future developments.
While Cayman has historically been the leading jurisdiction for captives in the healthcare sector,
it is broadening its horizons and many structures are becoming increasingly sophisticated.
The emergence of captives writing unrelated risk has continued into 2018, with three new
class B(iii) licences issued in the third quarter, and four in the second quarter. Agency and
broker-owned captives continue to be of interest, as do small and medium-sized enterprises
using segregated portfolio companies.
An area of growth in the industry often overlooked is group captives. In this edition of Cayman
Captive, we have collated statistics such as increasing memberships and increasing premiums
being written in these structures.
There is also an increase in reinsurance companies establishing in the Cayman Islands,
predominantly in the longevity space, for example life, annuity, long-term care and pension
One of the most significant trends is the increased use of insurtech, with many offshore
domiciles competing to become the go-to jurisdiction for technologies such as blockchain
and data analytics.
Cayman has been involved in a number of initiatives such as Tech City Cayman, which has
helped attract companies to establish a physical presence in the jurisdiction. It will be exciting
to see how this, along with other changes impacting the domicile, will pan out.
Owen Faulkner, editor