By Richard Cutcher From Captive Revue

Chris Le Conte, founder and managing director of Robus Group, has told Captive Review he believes the Isle of Man will struggle to compete with Guernsey for insurance linked securities (ILS) business.

The Isle of Man’s Insurance and Pensions Authority (IPA) completed a consultation on proposed special purpose vehicle (SPV) legislation in June, with legislation potentially signed off and active from August.

There is optimism within the Isle of Man’s insurance industry that there is sufficient demand for ILS business, but Le Conte believes the domicile will find it hard to attract business otherwise heading to Bermuda, the Cayman Islands or Guernsey.

“Isle of Man is going to struggle. You have to differentiate yourself in some way and I think they would struggle to differentiate themselves, particularly from Guernsey,” Le Conte told Captive Review.

“I’m not saying the Isle of Man will do no deals, but it is quite a competitive marketplace. Guernsey is competing with Bermuda and Cayman already and you have to find someone who has a specific reason to go the Isle of Man and that doesn’t seem massively likely.”

Alan Rowe, senior manager for policy at the IPA, said the reason they have begun down the ILS route is because of demand from the industry.

“The IPA was requested by industry to bring forward legislation as ISPV/ILS business is well suited and attractive to the Island,” Rowe said.

“The proposed framework is believed to provide an environment which will enable the Island’s insurance sector to attract ILS business, with the corresponding benefit to insurance managers, professionals and other service providers located in the Island.”

There is now also increased competition from within the European Union domiciles with Gibraltar and Malta set up to compete with Dublin for clients looking for a Solvency II compliant solution.

Le Conte is more optimistic about Gibraltar and Malta’s chances of finding new business, but admits it is a bit of a waiting game.

“There probably is some thoughts from people like us as to how ILS is going to work in a Solvency II world,” he added. “That’s where the EU guys are coming from – Gibraltar and Malta are thinking let’s make sure we’re fit for purpose and then if there is any drive from users to do it within the EU then we are ready.”

For more on this story go to: http://www.captivereview.com/news/1742632/isle-of-man-facing-tough-competition-for-ils-business-le-conte.thtml

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