The Cayman Islands are known for their nature and beauty. But as of today, there are more insurance licensees than there are plant species. That’s saying something when the forests are home to more than 650 species!

The Cayman Islands Monetary Authority (CIMA) lists 772 insurance licensees under their supervision. In 2020, there was an increase of 36. In the second quarter of 2021 alone, there were 20 new re/insurance licenses.

90 of these licensees were related to the domestic insurance market. A staggering 682 are international, and 9 out of 10 companies insure risks in North America. The commercial reinsurance sector also covers Asia, Latin America, and the US.

Healthcare represents nearly a third of all Cayman Island licensees. The last 15 years that have seen significant expansion and diversity. Insurers have moved into commercial reinsurance, writing life and annuity, pension, and long-tail liability coverage. Those who were fundamental in captive managers in the rise of healthcare are now looking into underwriting, actuarial, and business development.

So, what is causing the Cayman Islands to become a re/insurance centre over and above the Islands’ traditionally-famous activities such as scuba diving and snorkelling?

First off, the Cayman Islands are tax neutral. This makes it an ideal location for simplicity, transparency and prevents double taxation. What’s more, this makes the Caymans advantageous for captive insurance. Parties have to pay taxes in their home country but Cayman doesn’t add an additional tax for transactions in islands.

As an alternative to self-insurance, captive insurance can increase coverage. There is also greater flexibility in funding and underwriting. Insurance premiums can be tax-deductible, a huge bonus for small business owners. The Cayman Islands have the 15.4% of the world’s captive insurance, which is second only to Bermuda (19.3%).

Aside from these taxation advantages, the CIMA regulates the insurance industry in Cayman, keeping companies up to a high standard. These regulations include:

·     The Insurance Act and regulations

·     The rules, guidance, policies, and procedures (Insurance Regulatory Measures)

·     The Core Principles of Insurance Supervision (issued by the International Association of Insurance Supervisors)

Holding companies to such a high standard has made the re/insurance sector in Cayman a leading example for global standards and international practice. Cayman is represented both on the Group of International Insurance Center Supervisors and on the Caribbean Association of Insurance Regulators.

Collaboration is also key. Insurance managers, regulators, lawyers, accountants, and financial professionals all meet on a regular basis to build a solid, integrated infrastructure. Such cooperation enables providers to become trusted advisers for their clients. At the same time, innovation and alternative risk solutions are being put forward.

For insurance companies in the Cayman Islands, it’s not just about dollar signs. Efforts are focused on quality, collaboration, and diversity. Coupling this with high standards and tax neutrality means the Cayman Islands’ insurance industry is well positioned for the future.

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