For media enquiries, please contact firstname.lastname@example.org
COVID-19 is likely to present unprecedented challenges for the insurance industry, across all Iines of business, both domestic and international. Between the increasing number of confirmed infections worldwide, and the steps being taken in response by Governments and the private sector, COVID-19 has the potential to give rise to very significant losses, and associated legal disputes.
As a home for almost 800 licensed insurance companies and intermediaries, the Cayman Islands are the second largest domicile in the world for captive insurance companies, and Cayman holds the number one position worldwide for healthcare and Medical Malpractice Liability captives. US Workers’ Compensation business makes up another large component of the Cayman Islands’ captive sector.
The Cayman Islands separately hosts an active catastrophe bond and ILS sector, with many cat bonds issued through Cayman Islands special purpose vehicles.
The Cayman Islands are also home to a large number of insured entities, including hedge funds and private equity funds, publicly listed international holding companies, and professional service providers. Many of these entities purchase commercial insurance and reinsurance out of London, Bermuda, Hong Kong, Singapore, and the Cayman Islands, covering a wide range of risks and liabilities, including Directors’ and Officers’ liability, Management Liability, Professional Indemnity (Errors & Omissions), and Cyber liability.
Additionally, the Cayman Islands has a significant local tourism, construction, events, and real estate industry, with a large number of hotels, restaurants, and local development projects either recently completed, or actively underway.
Although it is far too early to try to place a value on total potential COVID-19 insured losses (whether related to the Cayman Islands or globally), it is worth noting that the SARS-epidemic in 2003 was the fourth-largest insurance loss event in Hong Kong’s history, generating legal disputes and appeals all the way to Hong Kong’s Court of Final Appeal (see, for example, New World Harbourview Hotel Co Ltd v. Ace Insurance Ltd  HKCFA 21, a business interruption insurance claim).
To continue reading full articles in PDF format:
COVID-19 and the Cayman Islands’ Insurance Sector