Page 10 - Layout 1

Insurance
UK motor business still driving ahead
Insurers in Gibraltar were last year responsible for an estimated record £5.19bn in premiums, almost all being from UK customers and the annual total is expected to rise significantly with the prospect of new markets post-Brexit, including from the Far East, writes Ray Spencer
of Lloyd’s motor syndicates to consider they were not competitive with non-Lloyd’s UK motor insurers.
Faced with an 18 to 24 months licensing process, some turned to Gibraltar which at the time offered new insurance companies authorisation in around 6 months, subject to meeting all EU requirements.
Only one decamped
Markerstudy was the first motor insurer to be incorporated in Gibraltar in January 2001 and was quickly followed by a number of others as local lawyers, operating under the Gibraltar Order 2001, were able to confirm Gibraltar’s EU passporting rights for financial services and began to suggest businesses consider establishing in Gibraltar rather than the UK.
Today there are around 45 insurance companies, comprising non-life entities, two life companies, some captive insurers and, of course the most being motor based. Largest amongst them at present are Admiral, Advantage (part of Hastings Group), Qatar Reinsurance - 2, Zenith and Markerstudy.
With Brexit uncertainty, most companies that also had European business made alternative arrangements, with only Slovakian- owned insurer, Premium managed by Artex Risk Solutions – one of five Gibraltar insurance managers. - relocating in May to Artex in Malta.
Gibraltar’s Robus Insurance, an independent insurance management, fiduciary and financial advisory group, which is also in Guernsey, opened a Malta office in November 2018, and Sovereign Insurance Services, established in Gibraltar in 2012 by Sovereign Trust as a corporate and international insurance broker, opened a Malta office in May.
As Cawdery observed: “The Single Market arrangements are uncertain for portfolio transfers, establishing new businesses, or re- domiciliation. While Gibraltar and British businesses must do something by Brexit day in the event of a hard Brexit, those in the EU writing business into the UK can sit and wait and see how things go for up to three years following as a result of the UK’s Temporary Permissions Regime, which is not reciprocal.
EU portfolio transfers
“This also means that insurers moving into Gibraltar [from Europe] to service the UK market have been slower than might have been expected,” the GIA chairman noted.
Admiral Insurance, Gibraltar’s largest insurer with 10% of its business in home insurance and the balance in motor business, arranged a portfolio transfer of its European
In anticipation of the UK – and by association also Gibraltar – no longer forming part of the European Union (EU) single market, insurers have been moving businesses into and out of Gibraltar; others have set up new insurance enterprises in the jurisdiction and there is also movement out of the UK to The Rock.
Chairman of Gibraltar Insurance Association (GIA), Shaun Cawdery remarked: “Gibraltar companies already insure at least 1-in- 5 UK cars and I believe there is a great opportunity for us to increase writing business there, especially in other lines.
Rock-based businesses increased their share slightly above 20% of the UK motor market in 2018 and saw total premium income from the circa 6m cars they insure rise by around 7% to reach £4.56bn over the previous
year, according to market analysis by accountancy firm, Deloitte presented at the Sunborn Hotel at end-September.
“The Gibraltar share of the UK market is still robust, despite Brexit uncertainty”, declared Daniel Delgado, a Deloitte (Gibraltar) partner. The research is based on insurers with mostly motors business, so the total premium income will be greater. The firm believes Gibraltar’s share will hold up even as there are signs that UK car insurance costs are falling in a highly competitive market.
The predominance of UK motor insurance business has marked Gibraltar out as different, and paradoxically owes its existence primarily through dissatisfaction at rising costs after changes in the 1990s with Lloyds of London, the world-leading insurance underwriting centre, of doing business in circa 2000 causing a number
Continued p12
10 Gibraltar International
www.gibraltarinternational.com