November 24, 2020

The Editor Speaks: Good and bad finance news

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The good news first. The Cayman Islands Monetary Authority in their November magazine “The Navigator” had two headlines: “Cayman Continues Captive Growth” and “Formations Up 93 Percent”.

Third quarter figures from the Cayman Islands Monetary Authority show the continued resilience of Cayman’s captive insurance sector. CIMA licensed 29 captive insurance companies in the first nine months of 2011, 14 more than during the same period in 2010. The total number of captives in the jurisdiction at 30 September 2011 stood at 730.

Demonstrating a new benchmark, total premiums as at 30 September were reported at US$9.6 billion, the highest recorded in CIMA’s history. This compares to US$8.6 billion as at 31 December 2010 (12% increase). Total assets under management, as of 30 September 2011, were reported at US$58.3 billion, compared to US$57.9 billion as at 31 December 2010.

CIMA’s Managing Director, Mrs. Cindy Scotland, commented: “This 93% increase in captive formations and close to $10 billion in premiums are indicators of the health of our captive insurance industry, despite the generally soft international insurance market conditions. In all of 2010 there were 25 new captives formed, so for our 2011 numbers to already be at 29, and with new applications pending, we anticipate this calendar year to reflect significant growth in new captives.”

And the Cayman Islands has continued as the leading jurisdiction for health care captives. As at September 2011, health care was the primary line of business for 256 companies (35%). Workers’ compensation remained the second largest line of business with 157 companies (22%) providing this as their primary type of risk insured.

Isn’t it nice to have some refreshingly good financial news when the economy is so bad and doom and gloom is the order of the day?

Unfortunately my joy was short lived as two pieces of other news soon dampened down my euphoria. The first was Premier McKeeva Bush’s warning in the Legislative Assembly on Thursday (1) contained in his two hour plus strategic policy statement. He spoke of tighter public spending over the next few years in order to rebuild our cash reserves and warning of austere times ahead.

The other piece of bad news was contained in the government’s Strategic Policy Statement (SPS) where the anticipated surplus of more than $12 million has now turned into a deficit of $4.5 million. However, in the premier’s speech he said he was expecting a surplus over the next financial years. The revised half year budget target has been raised to $511 million. Mr. Bush also mentioned his restrictions on borrowing by the UK by saying it was a “bitter pill to swallow.” It is always very hard to live within ones means but isn’t it prudent to do so especially in these difficult times?

Our premier does make a good point when he says, “We have to start saving money. We have to save something; we have got to get to that point where the bills are paid and there is money in the bank.”

There were no new solutions to solving the unemployment problem. He listed the proposed cruise port, Cayman Enterprise City, Narayana Health University, airport improvements and the ForCayman Investment Alliance saying they would help “our unemployment state and move towards full-employment” as long as they are not unduly hampered.” People could “scream and holler and accuse and say what they want” he said, “but the projects would put the country in good stead.”

I have to ask my same old question. When is the talking going to stop and the action started? Now that would be good news!

 

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