Guernsey captives made up more than half of the European market last year, according to figures from industry magazine Captive Review.
The research, conducted with Wilmington Trust, showed that of 17 new structures licensed in Europe in 2017, nine were domiciled in Guernsey. There are more than 800 captives in Europe of nearly 6,500 worldwide, Captive Review said, with Guernsey’s market share of the European business standing at 38%.
During the year, 31 captive licences were surrendered across Europe, 15 of them in Guernsey, but the net decrease for the region over the year was two-thirds of the decline in the market for 2016.
Industry analysts told Captive Review that many of the closures were due to merger and acquisition activity in the market, or old schemes coming to the end of their natural life cycle. Captives were still valued, they said, and there were hopes for growth among mid-market companies.
Chair of the Guernsey International Insurance Association’s Marketing Development Committee and Managing Director of Artex Risk Solutions Peter Child commented: “The current environment is challenging for captive growth. Being able to evidence that the substance of insurance decision-making and corporate control is genuinely undertaken in the captive's home jurisdiction is becoming increasingly important due to BEPS-related initiatives.
"Guernsey's history of corporate governance and insurance expertise ensures it can provide captive clients with on-island substance simply by continuing business as usual.”
The number of active captives declined by two per cent globally during 2017 to 6,482, with Europe experiencing consolidation of large group captives, and Caribbean jurisdictions under pressure from onshore competition in the US. Surrenders during the year were up from 409 to 562.