Guernsey Cites Recent Transactions as Examples of Innovation

Guernsey Finance is citing two recent insurance industry transactions as examples of the island's expertise and regulatory regime allowing innovation while meeting international standards.

Paratus Group recently chose Guernsey as the domicile for the world's first parametric fuel price insurer. Meanwhile, Replexus used a Guernsey insurance-linked securities (ILS) structure for the world's first catastrophe bond covering pure volcanic eruption.

Paratus Maritime Insurance Limited (PMIL) was launched to create price certainty, allowing policyholders to manage volatility while complying with new rules to limit sulfur in fuel oil on ships and a scheme to facilitate carbon neutral growth, Guernsey Finance said in a statement.

Robus Group was appointed as insurance manager for the new entity and provided advice on structuring and Guernsey's regulatory framework, supporting PMIL to become licensed as a Category 3 general insurer within a matter of weeks, the statement said.

Adele Gale, Robus director and group head of ILS, said in the statement that Guernsey was fortunate to benefit from an engaged regulator that embraced innovative prospects.

"Robus's knowledge of the regulatory regime allowed Paratus to assess the merits of Guernsey against other jurisdictions and, with a recommended structure in mind, we facilitated a meeting with the regulator in early 2020," she said.

Replexus was involved in the first pure volcanic eruption catastrophe bond, sponsored by the Danish Red Cross, which was brought to market through a Guernsey-domiciled reinsurance structure managed in Guernsey by Aon Insurance Managers.

The $3 million privately placed issuance was brought to market by Replexus and Howden Capital Markets through Dunant Re IC Limited, an incorporated cell of Replexus ICC (Guernsey) Limited.