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AON : Guernsey continues to lead as Europe’s captive insurance domicile of choice

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Aon Insurance Managers (Guernsey) Limited recently hosted the second Captive and Insurance Master Class in London.

According to Aon, Guernsey’s decision not to apply for third party country equivalence under Solvency II is having a positive impact on the island’s status as the leading European destination for captive insurance companies.  Delegates at Aon’s Captive and Insurance Master Class heard that the number of insurance licenses issued in 2011 continued to increase as the implications of compliance with Solvency II became better understood by captive managers and owners.

The event, held at the Chartered Accountants’ Hall in London, included presentations delivered by numerous experts from the insurance, banking and accounting professions as well as captive owners from the finance industry and the transport sector.

Delegates heard how captives can be used to provide significant cost savings, add risk governance, generate income and drive risk management innovation.  Specific case study scenarios were presented relating to captive financing of employee benefits.

Paul Sykes, Managing Director of Aon Insurance Managers (Guernsey) Limited commented, “Guernsey continues to be Europe’s leading destination for captives. It offers a robust and rigorous regulatory environment, which is responsive to innovation while not forcing captives to adhere to the disproportionate demands and excessive capital requirements of Solvency II.  The Solvency II regime so far has shown a profound disregard for industry and corporations that exercise prudent risk management by owning and operating captive insurance companies.

Guernsey complies with standards laid down by the International Association of Insurance Supervisors (IAIS), and its compliance is assessed by the International Monetary Fund.  While the capital requirements of Solvency II may be appropriate for commercial insurers who are dealing with the general public, many captive managers and owners believe the IAIS international regulatory standards will be sufficient for most traditional captives.”

Sykes added that Guernsey will sustain its position as European leader and one of the top four captive jurisdictions globally by embracing IAIS international regulatory standards without at this point seeking equivalence under Solvency II.

 “Aon is committed to Guernsey.” Sykes said.  “We are actively advising new and existing captive insurance company clients to help them achieve better capital efficiency and cost savings through restructuring their insurance programmes.”