Risky Business - Insurance Linked Securities In Guernsey

Guernsey has long been established as a leading jurisdiction for insurance business; having been providing captive expertise for almost 40 years.

Guernsey recently retained its title of European Captive Domicile of the year at the UK Captive Services Awards, defeating Dublin, Gibraltar, Isle of Man, Luxembourg and Malta, and is the fourth largest captive domicile in the world.

However, what is notable is the surge in alternative risk transfer business being structured through Guernsey, particularly utilising insurance-linked securities (ILS) and insurance transformers.

Alternative risk transfer (ART) uses methods other than traditional insurance and reinsurance to provide risk bearing entities with protection, mostly through the involvement of capital markets investors. ART therefore usually involves convergence of investment and insurance expertise, which is why it is not surprising that Guernsey has seen such an increase in these transactions, with its