July 2015

Spotlight – In international business, almost every market around the world does things in a different way. This often leads to misunderstandings and unfulfilled expectations. However, different does not need to mean difficult and knowledge of the needs and characteristics of specific geographic markets is an advantage to those who are active in the global economy. These articles help you understand different aspects of the insurance industry around the world, enabling those who do business there to feel more “at home, abroad.”

Is it a coincidence that small islands or overseas territories are often regarded as ideal for special financial and insurance solutions such as captives, tax havens, protected offshore jurisdictions and the like? Bermuda – population 65,000, Caymans – population 56,000, Guernsey – population 65,000 and Malta – population 445,000, slightly bigger. Another location with a stable government, a supportive economic and fiscal regime, low corporate tax and no capital gains tax or VAT is Gibraltar. And its population barely reaches 30,000.

Gibraltar has strong ambitions to become the Insurance Linked Securities jurisdiction of choice within the European Union. (Insurance-linked securities – ILS – are financial instruments whose values are driven by insurance loss events – typically hurricanes, windstorms and earthquakes and are the result of the process of convergence between the capital markets and the insurance industry. Catastrophe bonds (or cat bonds) are a segment of the ILS market.) Gibraltar’s ILS Guidelines have been prepared in line with Solvency II so as to be fully compliant based on the most up to date European Insurance and Occupational Pensions Authority (EIOPA) position. Gibraltar offers a new European Union EU domicile for cat bonds, sidecars and collateralised reinsurance based ILS transactions.

This can all get rather complicated and recently Intelligent Insurer teamed up with Gibraltar Finance to put together a special report on “Gibraltar: the EU and ILS domicile of choice” and this can be accessed here http://www.intelligentinsurer.com/page/gibraltar-the-eu-insurance-ils-domicile-of-choice. We are grateful to Intelligent Insurer to be able to provide the link to this clearly-written document and any questions should be directed to David Ward-Penny, commercial manager, at dward-penny@newtonmedia.co.uk