Captive Insurance Times feature article

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The Cayman Islands opened its Asia office in Singapore in June this year in an attempt to bolster its offering in the region. Ned Holmes drills into the motivation behind their latest expansion and what it says about the Asian captives market

First London, then Washington, and now Singapore. The Cayman Islands’ expansion continued this year with the opening of a third overseas office.

Announced last year but launched officially in June 2024, the Asia office follows predecessors — in Europe and North America — in helping the domicile to strengthen their offering in key markets.

Why Asia? Why now?

While Cayman has had an office in London since 1982, the European office began operating from those premises in March this year, and the North America office, based in Washington, launched in December 2022.

Why is Singapore considered the most recent addition to the puzzle? And why now?

Cayman has actually been considering opening an Asia office for some time, but the Covid-19 pandemic has partially slowed down the process.

According to Gene DaCosta, the Cayman Islands Government representative to Asia, the hope is that the new initiative can emulate the North America and Europe offices not just in the way they operate but “to collaborate with and support stakeholders in the region”.

DaCosta, who heads up the Asia office, adds that lessons learnt from the London and Washington locations have helped with the Singapore expansion.

He says: "The government has seen that there is real value in face-to-face dialogue and real-time support for clients in our jurisdiction, and these offices offer collaboration and assistance to our regional stakeholders, both in the public and private sectors, in the same time zone."

“For any jurisdiction engaging in global financial services, relationships that are mutually beneficial and the safety network that international regulation provides are vital.

“The government, therefore, is interested in having a physical presence in key regions — like Europe, North America, and Asia — that supports the government’s initiatives, the success of global financial services, and global regulatory standards.”

Importance of the APAC region

If nothing else, Cayman's decision to open a third overseas office in Singapore demonstrates its value for the area.

“Asia is a very significant and important region for the Cayman Islands,” explains DaCosta. “The Asian region frequently uses Cayman entities. As a result, there are a number of service providers with strong links to the Cayman Islands and a substantial physical presence."

He adds: “Based on the insights we have received, the Asia market in general remains very healthy, with Cayman continuing to be a dominant domicile for investment fund business.

“We know our track record in the funds sector and the value of our best-in-class fund structures have lasting appeal to investors.”

DaCosta points to numbers from the Cayman Islands Monetary Authority’s (CIMA) 2023 Annual Report, which highlights that the region accounts for the second-highest percentage of Cayman licensed banks and that Asian countries were among the top five providers of investment managers for Cayman funds.

The CIMA report also shows that the Asia Pacific region launched more funds (244) in 2023 than Europe (173), and that it makes up part of the market for Cayman's international insurance sector.

The industry also reflects the Cayman government's significance to the region, with Cayman Finance CEO Steve McIntosh highlighting the market's importance and supporting the decision to open an Asia office.

He says: “Asia is one of the key markets that uses Cayman Islands investment funds, financing vehicles, and joint venture companies.

“Many Cayman service providers have offices in Hong Kong and Singapore, from where they serve the wider region, including mainland China and Japan. The industry therefore welcomes and appreciates the establishment of a government office in Singapore, which reflects the importance of the Asian market.”

Targets

DaCosta is clear that the motivation behind launching the Asia office is not to respond to competitors or their products in the regionInstead, its aims are threefold: to support the work of service providers that use Cayman’s financial services products in the region; to assist Caymanians living in Asia, including working professionals and students; and to facilitate an exchange of ideas with Asian countries.

On the final target, he adds, “We have much to teach and to learn with regards to financial services and other areas such as education, social development, and healthcare.”

From an industry perspective, the government's move has the potential to fortify existing connections in the Asia region, establish new ones, and position them to effectively address emerging challenges in the fast-changing financial services and insurance market.

McIntosh says: "Having a permanent establishment in the region will help government and industry, cement the relationships that have been built over decades, develop new business, and respond to market trends."

The general consensus is that Cayman has the right person on the tiller.

McIntosh notes: “We are very fortunate to have Gene DaCosta, an experienced financial services professional as head of the Asia Office and Cayman Islands overseas representative.”

A captive opportunity

As CIMA's 2023 report illustrates, Asia represents a small part of the market for Cayman's international insurance sector. That is reflected across the captive insurance industry as a whole.

According to Swiss Re's insights, only five to six per cent of global captives have parent companies from Asia.

The company noted an emerging trend in the region, with companies forming new captives and looking to more effectively utilise current or dormant vehicles.

Home to 40 per cent of Fortune 500 company headquarters, Asia is emerging as a key market with significant growth potential for captives. Recent trends indicate increasing interest in captives across the continent. According to Marsh’s 2023 Captive Landscape report, businesses across Asia are increasingly turning to captives for risk management, with premium growth surging by 58 per cent — the highest rate globally.

Though premium growth in Asia dropped back to four per cent in 2024, according to Marsh, the numbers still suggest a continued shift toward the use of captives for risk management by companies in the region.

Cayman is undoubtedly aware of the opportunities presented by Asia's expanding captive market, and DaCosta expresses optimism that they can fully capitalise on these opportunities, with the assistance of the Singapore office. He says: “Compared to our North American client base, Asia has a relatively small footprint in our book of business. We see opportunities for further growth in the Asian captive market, and we are hopeful future discussions can prove fruitful.”

Looking ahead

Although it will take some time to align the Asia office's success with Cayman's long-term goals, its influence is already evident.

DaCosta says: “As expected, service providers, such as law and accounting firms, with strong links to the Cayman Islands have been keen for the Asia office to support notable events and stakeholder meetings taking place in the region.

“There have also been discussions with financial services industry associations on how best the office can support their efforts.

“The Asia office will look to subjects beyond financial services, so the hope is for constant dialogue not just with the professionals and service providers linked to the Cayman Islands but with government agencies and nonprofits based in the region.”

Right now, Cayman does not have plans to open any new offices in other regions, but should their latest expansion prove a success, perhaps more could follow.

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