The Cayman Islands: A Growing Force in Reinsurance
The Cayman Islands is increasingly positioning itself as a crucial player in the global reinsurance sector. According to Greg Mitchell, Chair of the Cayman International Reinsurance Companies Association (CIRCA), the jurisdiction is attracting substantial international capital aimed at tapping into the U.S. risk market.
Speaking before the ReConnect Conference in Cayman, Mitchell noted the jurisdiction’s unique appeal: “The market is in dire need of capital to meet burgeoning demand for products or to simply maintain existing markets. We’ve received feedback from some U.S. regulators and stakeholders that additional capacity and fresh capital are necessary to serve underserved consumers,” he remarked.
Mitchell emphasized the tax neutrality of the Cayman Islands as a major draw for global capital, primarily focused on U.S. risks. “Cayman can play a pivotal role in developing a more comprehensive market to serve these consumers,” he added.
He also highlighted the jurisdiction’s robust regulatory environment, led by the Cayman Islands Monetary Authority (CIMA), which boasts a long history of international collaboration. “CIMA was a founding member of the International Association of Insurance Supervisors (IAIS) and now has over 70 cooperative agreements with global regulatory authorities,” Mitchell pointed out.
Mitchell also lauded CIMA’s proactive collaboration with U.S.-based regulators, including a Memorandum of Understanding (MOU) with the National Association of Insurance Commissioners (NAIC) and several U.S. states. “When a CIRCA member company assumes business from a U.S.-based cedant, CIMA engages with the regulator of the cedant’s domiciliary state before approving the reinsurer’s transaction,” he explained.
CIMA is also pursuing Qualified Jurisdiction Status from the NAIC, which Mitchell views as an opportunity to enhance the jurisdiction’s reputation in its largest market. The upcoming ReConnect conference will feature a regulatory panel with CIMA’s Head of Insurance Supervision alongside four state Commissioners, highlighting this collaboration.
Looking forward, CIRCA aims to sustain Cayman’s attractiveness and stimulate organic growth within the reinsurance market. Mitchell anticipates an influx of international capital into Cayman, enhancing the much-needed capacity for the U.S. reinsurance market.
“I foresee a diversification of risks assumed and in the structuring of assuming vehicles. I believe the Cayman Islands will emerge as a respected, essential component of the global reinsurance market,” Mitchell stated. He emphasized the importance of preserving the jurisdiction’s appealing features and fostering local talent development.
CIRCA is committed to promoting opportunities within the reinsurance industry for young Caymanians, aiming for organic growth in both the number of companies and their financial capacities. Mitchell expressed hope that attendees of the ReConnect conference will forge meaningful relationships and gain insights into the regulatory environment and Cayman’s developed service provider market.
“I want them to envision themselves operating in Cayman or partnering with one or more of our CIRCA member companies,” Mitchell concluded.
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