The Channel Islands financial hub has overtaken Luxembourg as Europe’s leading captive domicile.
Guernsey has overtaken Luxembourg to host the largest number of captive insurance structures in Europe.
Last year, Guernsey approved 12 new captive licences and had three surrenders, a net increase of nine, giving a total of 201 captives domiciled in the island at the end of 2022.
That was enough to overtake its nearest rival captive domicile, Luxembourg, which reported a total of 195 captives at the end of 2022. The two domiciles were exactly tied in 2021.
“It is testament to the quality and experience of our practitioners,” said Rupert Pleasant, CEO of Guernsey Finance.
“Guernsey is a globally renowned centre for specialist financial services, a jurisdiction of substance, and it is gratifying to reach this milestone,” he said.
“Guernsey has a long history of domiciling captives, with the first captive insurer being incorporated into the island over 100 years ago. Since then, the island’s insurance industry has continuously evolved and innovated to provide the very best infrastructure for its clients, and we were proudly recognised as European Domicile of the Year at the 2022 European Captive Review Awards,” Pleasant said.
“This is a great endorsement of Guernsey’s captive offering, coming soon after our ‘100 Years of Captives’ anniversary celebrations,” said Mark Elliott, chair of the Guernsey International Insurance Association.
“We have a high-quality, experienced captive infrastructure, with leading service providers and a pragmatic and robust regulator, which is what sets us apart. We look forward to continuing to innovate and promote the captive proposition to existing and new clients going forwards,” Elliott added.
A captive, in its purest form, is a company set up by its owners primarily to insure the risks of its parent and/or subsidiaries. Guernsey Finance lists the benefits of captive insurance, relative to traditional insurance buying, on its website as follows:
Unlike rivals such as Luxembourg, Guernsey is not a part of the European Union. Since 2016, captives domiciled in the EU have had to comply with Solvency II.
Guernsey Finance added: “Instead, Guernsey’s new regime distinguishes between commercial (re)insurance and captive insurance. As such, captives in Guernsey will have a capital floor of £100,000 and confidence levels of 90%. This proportionate approach should be very attractive to current and potential captive owners, and especially those who still want a domicile within the European region.”