The captive insurance industry in the Cayman Islands is booming.
The Cayman Islands Monetary Authority (CIMA) has reported that it
received 67 applications for new licenses in 2012, with 52 licenses
granted and the remainder scheduled for approval in 2013. Since 1
January 2013, one license has been approved and another 11 have been
approved in principle. The total number of new licenses accounts for an
increase of more than 58% over 2011 and is the biggest year for captives
since the hard market of 2004.
Although Cayman may be largely known as being a healthcare captive
domicile, the 52 new formations came from various sectors including
healthcare, life reinsurance, P&C reinsurance, manufacturing and
technology. A number of group captives were also formed as segregated
Existing Cayman captives also dramatically grew their assets. Total
premiums written by captives were reported at US$11.8 billion and total
assets under management climbed to US$88.1 billion, their highest ever
levels, which grew 24% and 51% respecively.
"Cayman understands the captive insurance business and the role it plays
in the risk management space, and when I say Cayman, I mean the industry
together with the regulator," said Rob Leadbetter Chairman of the
Insurance Managers Association of Cayman (IMAC). "These statistics are
not surprising to us, because we have been building our core
competencies over decades to make Cayman the 'go to' domicile in the
There are some 5,000 captives globally and since 1980, 3,095 captives
have been licensed in the Cayman Islands. The Cayman Islands remain a
very popular jurisdiction for captive formations, which including the
780 segregated portfolios, is close to 1,500 entities. This popularity
is attributable to a combination of sensible legislative framework, the
relationship between IMAC and CIMA, together with a harmonised
With the new Insurance Law now in place, Cayman expects to welcome even
more insurance business to its shores. The new law is designed to
clearly differentiate between the domestic and international insurance
markets in the Cayman Islands and to regulate each in accordance with
its own requirements. It strengthens legislation to protect Cayman
entities and brings the law formally into line with international
standards. And finally, it sets out a framework to develop the
reinsurance market and to create a clearer understanding for the
insurance linked securities (ILS) market. Most importantly, it embraces
the concept of 'proportionality' and addresses entities based on the
nature, scale and scope of risk.
Insurance Managers Association of Cayman (IMAC) is a non-profit
organisation run by the insurance managers of the Cayman Islands. In
operation since 1981, IMAC's aim is to act as both regulatory liaison
with the Cayman Islands Government and to promote the Cayman Islands as
a domicile of choice for captive insurance companies.
IMAC hosts the world's largest captive insurance conference, attracting
nearly 1,300 captive managers, service providers and directors annually.
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