London ILS Market Off to a Slow Start; Guernsey Believes It Can Help

Guernsey believes that it can work closely with London to help develop its insurance-linked securities (ILS) sector, following findings from a Guernsey roadshow that revealed the ILS business in London has been slow to take off. At the roadshow, Guernsey practitioners visited lawyers and industry representatives in both London and Zurich. 

Peter Child, managing director of Artex Risk Solutions in Guernsey and chairman of the Guernsey International Insurance Association's market development committee, said, "We gained the view from those that we spoke to [at the road show] that London [may] be seen as complementary to Guernsey's ILS sector. While there is demonstrable political will to see the London ILS offering thrive, maintaining its insurance sector's reputation as a full-service center capable of delivering a full range of insurance and reinsurance services, it is clear that the ILS sector is developing fairly slowly.

"We believe that Guernsey still holds a number of advantages—the responsiveness of our regulator, our experience in the sector, the breadth of our offering in the funds and insurance space, and our status outside of Solvency II.

"Although London is nominally a competitor, if London can make a contribution to drive forward the growth of the ILS market, we think that should be good for all involved."

The United Kingdom (UK) introduced an ILS regime on November 29, 2017. The regulations aimed to introduce a competitive regulatory and tax regime for ILS to ensure that the UK gets a share of this rapidly growing market.