The insurance sector has long been an important element of the financial services industry in the Cayman Islands. Although the number of licensed reinsurers remains low, there has been steady growth in this sub-sector of the insurance industry, with many of the new companies setting up offices in Camana Bay.
North End Re – one of six reinsurers in Camana Bay, with Greenlight Re, Aureum Re, Knighthead Annuity, RBC and United Insurance Company being the other four – recently moved into a new 5,600-square-foot office space on the second floor of Camana Bay’s new 10-storey office building, 60 Nexus Way. It made the move from another Camana Bay building, 18 Forum Lane, which is where it set up shop after first being established in Cayman in 2021.
General Manager and Chief Operations Officer Fearghal O’Riordan says there were a number of reasons North End Re chose Camana Bay, including its central location, award-winning office space and being in the Town Centre.
“You spend a lot of your working life in an office space,” he says. “It’s important that you come to an environment each day that you want to go to and enjoy working in.”
Before North End Re could make the decision to move to Camana Bay, it first had to decide on the Cayman Islands as a jurisdiction. The company is wholly owned by BAM Re Holdings Ltd., which in turn is a wholly owned direct subsidiary of Brookfield Reinsurance Ltd., a public company listed on the NYSE and TSX under the symbol “BNRE.”
Like several of the other entrants to the Cayman Islands reinsurance sector in recent years, North End Re is primarily focused on a specific aspect of the reinsurance market here in Cayman, says O’Riordan.
“North End Re is established in the Cayman Islands under the Companies Law for purposes of carrying on all kinds of insurance and assurance business, and currently focuses on reinsurance of asset-intensive life and annuity products for third-party direct insurers,” he says.
There are several reasons North End Re chose the Cayman Islands, including the highly regarded regulatory regime overseen by the Cayman Islands Monetary Authority, the high quality of local financial industry service providers and an efficient licensing process, O’Riordan says.
“We carried out a very thorough due diligence prior to taking the decision to establish here,” he says. “We had a very positive experience with the regulator and service providers — insurance managers, law firms, etc. — from the outset. We found that all major consulting firms had a local presence to support the establishment of a reinsurance company.”
Aureum Re, which was established and licensed by the Cayman Islands Monetary Authority in late 2016 and moved into Camana Bay’s 94 Solaris Avenue building in 2017, also currently mainly deals with the reinsurance of fixed annuities and other kinds of asset-focused products, although its CEO, David Towriss, says, “We will always look at other opportunities.”
The company has seen its book of business increase by some 50% since 2018 even though there is more competition locally, Towriss says.
He believes growth in the sector is driven, in part, by the ease of living and doing business in Cayman.
Although growth in the reinsurance sector has been relatively slow — there have been only five new licensees since 2018 — Towriss believes there will be a snowball effect.
“We’ve already become a size that U.S. regulators will take note of and I think the growth will continue,” he says. “The more companies that come, the more Cayman will be attractive to others.”
One of Cayman’s longest-established reinsurers, Greenlight Re, provides diversity beyond the life and annuity focus in the local market.
“Most of the growth in the reinsurance industry has been from the long-term reinsurance — life and annuity business,” says Chief Financial Officer Faramarz Romer. “Greenlight Re is a property and casualty underwriter and we have seen limited new P&C reinsurers enter the market. We continue to advocate for growth in P&C reinsurers and [are] starting to hear whispers of new, large P&C reinsurers considering the Cayman Islands as a jurisdiction.”
One entity that Romer says can help attract new reinsurers to the jurisdiction is the Cayman International Reinsurance Companies Association.
“CIRCA has positioned itself as an invaluable resource for both new start-up reinsurers as well as established reinsurers looking to expand or redomicile,” he says. “As an active advocate of the Cayman Islands, CIRCA continues to highlight the benefits of a reinsurer establishing its operations in Cayman.”
Founded in 2020, CIRCA assists the industry in several ways, said Knighthead Insurance and Life Assurance Company Director of Operations Anika Hewitt.
"CIRCA provides transparency to interested parties in the regulatory regime, articulates the benefits of conducting business with and/or out of Cayman, and clarifies the process for establishing and operating a reinsurance entity," she says. "Secondly, enabling an open dialogue amongst reinsurers operating in Cayman supports aligning on the strategic direction of Cayman and consistent communication back to stakeholders."
This article was originally featured in the December 2023/January 2024 print edition of Camana Bay Times.
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