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(CNS Business): Capturing the re-insurance industry from Cayman’s main competitor, Bermuda, could net the Cayman Islands around as much in GDP as Cayman’s entire financial services industry currently contributes, according to statistics from the Association of Bermuda Insurers and Reinsurers (ABIR). With the industry in Bermuda in decline, insurance professionals in Cayman say the forthcoming legislative changes about to be enacted will pave the way for commercial reinsurers to incorporate in the Cayman Islands, and this country will then be well positioned to become the domicile of choice for starting a commercial reinsurer.
At the Cayman Captive Forum, held this week at The Ritz-Carlton, delegates heard from Premier and Minister of Finance McKeeva Bush that the government was planning to implement key legislative changes, not only with impending implementation of the Insurance Law 2010, but also amendments to the Immigration Law, which would attract reinsurance professionals to set up shop in the Cayman Islands, an industry that has traditionally been located in Bermuda.
Bermuda has a lot to lose. In its 2009 economic impact survey, the ABIR found that the association’s 22 member insurance and reinsurance companies contributed nearly $950 million to the Bermuda economy. In 2009 the members wrote $61 billion in global gross written premium on a capital base of $84 billion. In comparison, a 2009 report on the economic benefits the financial services industry provided the Cayman Islands economy, produced by Oxford Economics, found that in 2007 the industry contributed $947 million to the economy.
Underscoring the high salaries associated with the industry, Patrick Thiele, ABIR board chairman and also CEO of Partner Re, said in a press release last year that the average compensation for ABIR member Bermudian non-work permit employees was $178,000 in 2009.
Steve McIntosh, CEO with recruitment firm CML, says that the industry in Bermuda is well known to be suffering as a result of excessive costs and immigration restrictions, both of which have been essentially taken off the table for reinsurance companies moving to Cayman, he said.
Thiele recognised the need for Bermuda to remain competitive, saying this was one of the challenges to its international insurance sector, particularly with regard to human capital.
“It is critical that we attract and retain high quality (re)insurance professionals in Bermuda and that the costs of those employees are not out of line with other jurisdictions. We want to work with policy makers to make that a reality,” he is quoted as saying.
Insurance Managers Association of Cayman (IMAC) Chairman Clayton Price says further to Bush's announcement at the Cayman Captive Forum this week that the Regulations relating to the Insurance Law will be shortly presented to the industry for consultation and then subsequently passed by Cabinet, IMAC was enthusiastic, “as this paves the way for the formation of commercial reinsurers to incorporate in the Cayman Islands and to have a framework to operate,” he said.
Proposed changes to the Immigration law were also warmly received by the association.
“IMAC is also pleased to hear about the ten year work permits which will be available to reinsurance executives with a title of vice president or higher as this will provide tremendous stability to the ‘C’ suite who seek to attract qualified staff. The Cayman Islands is an attractive jurisdiction to work and reside as well as already providing overseas nationals the opportunity of home ownership. Being a short flight to the United States with several gateways including New York, Atlanta, Charlotte, Houston and Miami as well as flights to the UK and Canada, the Cayman Islands is well positioned having put the updated legislation and immigration amendments into effect to become the domicile of choice for starting a commercial reinsurer,” Price said.
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