Captive Insurance Market Booms In The Cayman Islands

Tom Burroughes

23 January 2013

Captive insurance companies registered in the Cayman Islands are booming, the Caribbean jurisdiction reports, with total assets under management rising by 51 per cent in 2012 from a year earlier to stand at $88.1 billion.

A captive insurer is a company mainly insuring risks of businesses which are related to it through common ownership. These vehicles can form a part of business, estate and asset protection planning, hence their relevance to wealth managers.

Total premiums written by captives were $11.8 billion last year, a rise of 24 per cent year-on-year, the Cayman Islands Monetary Authority said in a statement.

The regulator received 67 applications for new licenses last year, with 52 licenses granted and the remainder scheduled for approval in 2013. The total number of new licences accounts for an increase of more than 58 per cent over 2011 and is the biggest year for captives since the hard market of 2004, the regulator said.

Globally, there are around 5,000 captives. Since 1980, 3,095 of these structures have been licensed in the Cayman Islands.