By Rob Leadbetter, USA Risk
“The world as we have created it is a process of our thinking, it cannot be changed without changing our thinking”. Albert Einstein
Albert Einstein may have been suggesting that with the determination with which people, and particularly groups of people, hold on to their precious thoughts and opinions, it often takes someone or event of great significance to shake an ingrained philosophy. This has been and remains the challenge of the Cayman Islands financial services industry as it works to communicate the benefits that are provided to the ‘average Joe’ through the use of Cayman captives, such as lower cost healthcare, more efficient workers’ compensation claims, and stronger employee benefits packages.
To do its part in addressing this ongoing challenge, The Insurance Managers Association of Cayman (“IMAC”) made bold moves this year to start a discussion about these undeserved negative perceptions of Cayman held so widely in the mainstream.
As any smart business person will tell you, success lies in recognising the gaps – being present where no one else is, positioning oneself in a desired, unoccupied place and planting some roots. IMAC recognised that one of the most significant gaps facing the industry was communications-related: how Cayman’s financial services industry as a whole, and particularly the captive insurance industry, communicated with the rest of the world. Addressing sophisticated markets requires a sophisticated message, but that message also has to be sufficiently succinct to be understood by those less savvy. The message also had to meet people ‘where they are’, meaning online, at conferences, at meetings and in day to day conversations, in person, in mainstream media and through social channels.
Armed with this, IMAC set about determining a positioning statement for Cayman’s financial services industry. Looking carefully at the most common criticisms received, paired with the solid backing of what Cayman stands for, IMAC selected: “Cayman Islands. Clearly Better Business” as the point from which all communications to the world would stem.
It makes good sense. Break it down.
“Clearly” makes subtle reference to the transparency of the jurisdiction and its tireless efforts in being at the forefront of international regulatory initiatives; working to make sure that those initiatives were based on a level playing field, that is to not to be upheld by Cayman alone. In April 2013 Cayman received top marks in the OECD’s latest Global Peer Review. It has just signed a Model 1 Intergovernmental Agreement with the United States with regards to FATCA, solidifying the tax authority-to-tax authority information exchange. Cayman has strived over the last few decades to attract and keep the high quality business that is the backbone of our economy.
“Clearly” also inspires people to think clearly, and hopefully differently about their previously held notions about the Cayman Islands based on novels and fictional characters.
“Better” is a nice word. It is more confident (yet less cheeky) than “best” and underscores the point that Cayman has plenty to be confident about. Cayman’s new Insurance Law and accompanying regulations have modernised the Cayman offering, ensuring that different areas of insurance – i.e. domestic insurance, captive insurance companies, insurance linked securities and reinsurance companies are all regulated based on the uniqueness of their structures and on their own individual risk profiles, increasing transparency and streamlining processes, which is what any commercially minded, legitimate company would want.
“Business.” The Cayman Islands is proud of its high quality client portfolio comprising the world’s leading financial institutions, global corporations and governments, and those users have a high level of respect for the level of innovation and quality that brought Cayman to the top and ensures that it stays there.
The Cayman Islands captive insurance industry hit an all-time high of US$13.5 billion in total premiums and US$82.8 billion in total assets as at 30 June 2013. These figures are up 52 per cent and five per cent respectively over the same period in 2012, which had been considered a banner year for growth in the industry. This is encouraging and demonstrates the fact that Cayman continues to attract solid business because of its high level of transparency and regard for international regulatory initiatives and its history of integrity.
The Cayman Islands Monetary Authority (CIMA) reported that they oversee 750 class B, C and D companies as at 30 June 2013, with 412 of those pure captives and 134 as segregated portfolio companies (SPCs).
The majority of these captives are from North American-based companies, with 34 per cent of them relating to medical malpractice and 21 per cent covering workers’ compensation. The Cayman Islands recently signed a tax information exchange agreement (TIEA) with Brazil, providing a gateway to new markets and the opportunity to the continued explosive growth in that region. The TIEA recently signed with Canada has enhanced the business levels of Canadian business and an IMAC delegation will be heading to Victoria British Columbia in October as sponsors of the RIMS Canada conference to explore and develop this area of business.
With the carefully thought-out positioning statement in hand, IMAC has been aggressively working to get this message out to the world through digital and social media channels and, vitally important, the old-fashioned way of speaking face-to-face with interested people at international conferences (including RIMS, a risk management conference attracting thousands of delegates, ASHRM, the annual healthcare conference and of course with the 1,300 delegates expected at the 2013 Cayman Captive Forum).
We invite you to follow us on LinkedIn and Twitter to gain thought-provoking insights and information related to the captive insurance industry, or for something a little lighter, ‘Like’ us on Facebook, where the messages are geared to young people who might be interested in pursuing a career in the financial services and insurance industries: it features information on the IMAC Scholarship Fund, stories on what to expect from a career in insurance and articles that explain what the captive insurance industry does. A new, easy-to-navigate website at caymancaptive.ky will be launched this autumn with the new “Cayman Islands. Clearly Better Business” branding in advance of the Cayman Captive Forum.
IMAC has kept a steady stream of industry articles and press releases (20 so far this year) submitted to the trade press and distributed on international news feeds. We are also participating in and endorsing the publication of a new locally produced magazine Captive Insight, which will feature thought-provoking articles based on the issues facing Cayman’s captive insurance and reinsurance industries.
And last, but certainly not least, IMAC welcomes the addition of a separate and distinct Ministry of Financial Services within the Cayman Islands Government and is delighted to welcome the newly elected officials who will helm this new Ministry: the Honourable Wayne Panton, former Global Chairman, Walkers as Minister and Mr. Roy McTaggart, former partner at KPMG Cayman as Councilor. These gentlemen are industry veterans, having served careers in the trenches. They understand the issues the industry as a whole faces and we are delighted to have them leading the Cayman Islands financial services industry forward.
IMAC’s position is that we have been too quiet for too long and it is important that we work hard, together, to give people enough solid, factual information that will help them to see the benefits Cayman provides to them. We recognise, that, again in the words of Einstein, “We cannot solve our problems with the same level of thinking that created them” and it is time to let the world know that Cayman is innovative, progressive, and transparent: indeed, a place of and for “Better Business”.
Published in the Q4 2013 issue of Cayman Financial Review