The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The international captive insurance industry is “happy to see the Bahamas is back in the game”, a senior private sector executive telling Tribune Business that diversification trends and this nation’s capital/fee requirements provided a potential competitive advantage.

Aliya Allen, the Bahamas Financial Services Board’s (BFSB) chief executive, said the Captive Insurance Companies Association (CICA) conference generated “a lot of interest” in this jurisdiction from small and medium-sized captives and their managers.

And, with new jurisdictions emerging every year as captive insurance domiciles, Ms Allen said there was every encouragement to think the Bahamas could do likewise.

“CICA went very well,” Ms Allen told Tribune Business. “We had a lot of interest from small and medium-sized captive managers. That’s where we’re seeing the interest, and it’s probably because we tend to be quite competitive on capital requirements and also fees. For small and medium-sized captives, cost does matter.”

Fees, she suggested, were in the $2,500-$3,000 per annum range, while required capital contributions were $200,000 for captives underwriting life insurance risks, and $100,000 for all other forms of risk.

“It was a good conference for getting the message out that the Bahamas is in the business of being a domicile of choice,” Ms Allen told this newspaper. “People said: ‘We’re happy you’re back’.

“It’s really a small industry, and everyone knows each other. They’re happy to see we’re back in the game. One of the key takeaways was that people are looking to diversify their domiciles, and don’t want a concentration of risk in one jurisdiction.

“They do want a domicile that has reputation, infrastructure and adds to their menu of choice. It’s a bit of a chicken and egg scenario, though. We have a small number of captives now. They say how many captive managers do you have? They’re difficult to identify, as we don’t have a lot of them.”

Drawing further encouragement for the Bahamas’ efforts to re-establish itself as an international captive insurance domicile, Ms Allen added: “There are captive domiciles emerging every year, which means nations are coming from zero, so it can be done. It means there’s opportunity for the Bahamas.

“We had interest from captive managers saying they were certainly willing to take a look at the Bahamas as a domicile. There was one from Canada who seemed interested. The problem is we often get disillusioned with captives and people start to think: ‘What’s the point?’There’s a certain amount of promotion and effort that needs to be made in promoting, building capacity and skills, but there’s enormous opportunity for the Bahamas.”

Captive insurance is one of three key financial services areas set to receive the BFSB’s marketing focus in 2013, while the Ministry of Financial Services is also focusing on relaunching the Bahamas’ as an external insurance jurisdiction.