Cayman Islands: The Premier Global Financial Hub – Issue 5

Page 101

Life Reinsurance

Industry challenges and innovation Kristian Leese, Aureum Re

In the last edition of this magazine, Cayman Finance published an article on Financial Reinsurance and the reasons why Cayman has seen a significant inflow of life and annuity reinsurance companies. The authors explained that Cayman’s decision not to pursue Solvency II equivalency was a key factor in attracting reinsurers who have a North American focus. Companies such as Aureum Re saw material benefits from choosing Cayman given their desire to report results under a regime which is more closely aligned to their US life insurance clients (ie. risk based capital and US statutory accounting principles). Since

that article was published we have seen continued collaboration between the Cayman Islands Monetary Authority (CIMA) and the National Association of Insurance Commissioners (NAIC) as noted by the memorandum of understanding which was signed in August 2018. The life and annuity reinsurance market continues to attract interest from new entrants including hedge funds looking for more permanent capital sources. The market offers meaningful spread opportunities given the long duration


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