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Insurance
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understanding the roles and responsibilities that are performed locally. Company boards tend to be quite small compared to – for example – the UK, and as a result it is less likely that each Board member will have a tightly defined job description, rather looser areas of responsibility. This is an area which I expect to be developed further by the regulator this year.
Other Current Issues of interest • Current Comparative Strength of the UK Motor Insurance Market The Gibraltar insurance industry is dominated by UK motor insurance premium (it is estimated that just under 20% of total UK motor premium currently emanates from Gibraltar), and this insurance market is notoriously cyclical.
It has been enduring a difficult period for two or three years but there are signs that 2016 and hopefully beyond will be stronger performers. This recovery is well timed given the enhanced capital requirements that
all insurers face in the new Business As • Part VII Transfers
Usual world.
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Sad to report but there have been no noticeable positive developments in this long running saga. Should Brexit happen it would be imperative that the Government of Gibraltar agree with the UK Treasury that Gibraltar be allowed to receive portfolio transfers from the UK. Bizarrely, we have seen further inward transfers from other EU member states, but this door may be closed in a post-Brexit world.
Investment returns The financial markets have been turbulent for several months now and the prudent insurer will most probably have lowered return expectations with funds being moved away from potentially more risky investments to shorter duration, higher quality asset classes. The market volatility has arisen at a time when the new Solvency II (sorry, Business As Usual) rules have impacted on certain asset classes by requiring higher capital charges being imposed; to illustrate the point, property now incurs a 25% charge whereas a three month bank deposit with a secure institution will incur only 7%.
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ILS Business
Rating Agencies
The first of these transactions was completed last year and it is believed a second is imminent. There has not been the steady stream that was to be hoped for as yet, and again I believe it will be an area that is uncertain until after the UK Referendum.
www.quest.gi
I am aware of several insurers that have obtained strong ratings from AM Best in the last year or so, although many are choosing not to publish these at the present time. I believe this will be an area that will continue to develop.
www.gibraltarinternational.com
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