Message from the Chairman

It is often said that people overestimate the amount of change in the long term but underestimate the amount of change in the short term. I think it can be said that we all underestimated the amount of change during 2020, especially noting that my 2019 report contained not one mention of an emerging virus or the potential impact on businesses.

If a reminder were needed that our world is volatile, uncertain, complex and ambiguous (VUCA), then 2020 gave us just that, and just in case we did not understand previously, we have all been reminded of the difficulties of strategizing into the VUCA World.


I start this year with the subject that has dominated most of our attentions in 2020, and is possible will continue to dominate through 2021 as well. COVID-19 has provided a huge challenge for all of us in one way or another, whether it financially through lower business activity or in certain lines through increased claims activity, or more widely through operational challenges.

Operationally, the Gibraltar insurance industry has generally managed the transition to remote working well, although clearly this is not without difficulties. Now nearly one year on since the start of the Government lockdown measures, many businesses will be itching to get their staff back into the office and return to ‘normal’ while others will be adapting processes to accommodate remote working on a more permanent basis. For the Gibraltar insurance industry, the pandemic and the prevalence of remote working as a result may prove an opportunity as the need for more or better space - which has always been a restrictive factor - may diminish. In all cases, new ways to manage culture and maintain corporate values within an increasingly disparate workforce will create its own challenges.

On a wider note, the industry has worked with the Gibraltar Government during this very difficult period through its interactions with the Gibraltar Financial Centre Council (GFCC) and the key role they have played in the Covid Economic Liaison and Advisory Committee (CELAC) at the start of the pandemic. Importantly, the GIA give thanks to the Executives of the GFCC for their interaction both with the GIA and with the Government. The GIA supports the actions of the Gibraltar Government through the pandemic, and in the main (along with much of the Finance Centre) has been a pillar of strength in Gibraltar’s economy during this difficult time.

I only wish that Solvency II could fall off the agenda and not be replaced by the challenges of 2020!

Paul Cole


A relief for many, even if only due to Brexit fatigue, that Brexit finally happened effective 1 January 2021 when the transitional period came to an end. The UK agreed a Trade and Cooperation Agreement (TCA) with the EU on 24 December 2020 and the Gibraltar Government also announced on 31 December 2020 that the same parties also had political agreement over Gibraltar’s entry into the Schengen Acquis.

The TCA excludes Gibraltar, and in the main excludes financial services. However, the TCA remains relevant to many of our members for a variety of reasons, not least as the majority undertake business in the UK and therefore the implications on the UK economy will impact our members business models. There are a number of risks which may impact members during 2021:

  • The TCA has been ratified by the UK Government on 30 December 2020, but remains unratified by the EU, with the expectation that this be ratified by 31 March 2021. A failure to ratify, or a delay in ratification which is not approved by the UK, gives rise to no deal risk (again).
  • The EU is yet to decide on certain measures applicable to financial services, the most pertinent being equivalence. However, since the TCA does no cover Gibraltar, any equivalence designation would not apply automatically to Gibraltar insurers. The Gibraltar Government has indicated its reluctance to expend political capital in exploring equivalence for Gibraltar given that this remains uncertain for the UK and Gibraltar firms have not and are unlikely to significantly utilize the benefits of equivalence.
  • The media is widely reporting issues with UK exporters and the difficulties with non-trade barriers that have been erected between the UK and Northern Ireland as well as between the UK and the EU. There have been little such impacts on importers as a result of the UK implementing temporary waivers on imports, which are due to end on 30 June 2021. The eventual implementation of such measures which will be important to ensure the security ands safety of UK trade. Such non-trade barriers on UK imports, coupled potentially with increasing demand from lifting of pandemic restrictions, may lead to difficulties in relation to imports.
  • The UK Government, following Brexit, has introduced an immigration system which limits the ability of lower paid EU workers to obtain working visas for the UK. This may impact claims costs – for example, care costs.

The New Year’s Eve agreement in relation to Gibraltar provided clarity on the political will for Gibraltar to join the Schengen Acquis. Furthermore, there are ongoing talks in relation to customs arrangements between Gibraltar and the EU although no political agreement on this at this stage. The GIA, in conjunction with the GFCC, has contributed to the Government’s Treaty Liaison and Advisory Committee (TLAC) to input into the needs of the sector in negotiating this treaty, and are tentatively supportive of the Government’s intentions to agree a treaty between the UK and the EU in respect of Gibraltar. However, as with all such things the key test will be on the reading of the eventual treaty and the understanding of the full implications for Gibraltar and our sector.

For something that is supposedly ‘done’, Brexit still continues to provide significant uncertainty and is likely to continue to do so for a number of years yet.

Regulation and Legislation

The initial impact of the pandemic slowed down the industry’s regular dialogue with the regulator, as the GFSC sought to give licensees room to manage the impacts and focus on policyholder outcomes first and foremost. This approach was welcomed by the GIA. The Executive and the GFSC have since fallen back into a quarterly meeting rhythm.

The pipeline for new busines remains strong, with the GFSC seeing a number of new applications. Unfortunately there has been some negative headlines, particularly early in 2021, with the announcement that an administrator had been appointed at Prometheus Insurance Company Limited. As noted in my 2019 report, such negative press can be ill afforded at any time, but particularly now and going forward as the trading relationship with the UK becomes even more critical.

On the trading relationship with the UK, the Gibraltar Authorisation Regime (GAR), as part of the Financial Services Bill, continues its passage through the UK legislative system and is expected to pass in the latter half of 2021 and become effective from 1 January 2022. Locally, the Government published MGA legislation allowing MGAs to be managed by insurance managers, and this was accompanied by the GFSC’s Managing General Agents Expectations Paper – which should be noted by all members, not just MGAs, in particular the sections on corporate governance and substance.

The GFSC has highlighted that it is placing an emphasis on close relationships between insurance carriers and intermediaries, and in particular the financial links between them. Further, there is to be a focus on the role of internal audit during the course of 2021.

Insurance Management

As has been the case historically, the insurance manager model continues to remain an important aspect of the Gibraltar insurance market. This is especially the case with the strong pipeline for new applicants and a trend for new insure-tech businesses.

A continuing topic of focus is on ‘head office requirements’, and the previously mentioned MGA Expectations Paper from the GFSC gives some guidance in this area.


Many intermediaries have faced a difficult year as a result of the pandemic, with premium volumes in many sectors under challenge. For some this has been especially marked since the financial services sector was excluded from the Government’s BEAT COVID measures – while this was the right approach in the main due to the strength of the financial services sector in general, some exceptions needed to be considered (not least those intermediaries in the travel sector), and the GIA sought to represent their interests through the GFSC at the outset of the pandemic. As a result, the Government was open to BEAT COVID type assistance to financial services in specific circumstances on a one-by-one basis.

As a result of various factors including but not limited to the pandemic, the market for professional indemnity and related covers has hardened significantly which has led to intermediaries struggling to place business in this area. While this is a problem for all jurisdictions, the situation is marked in Gibraltar due in large part to a lack of understanding of the position of Gibraltar in a post-Brexit world, and the GIA has been working closely with the Finance Centre in order to seek to engage with Lloyds and wider market participants in order to raise the level of understanding around Gibraltar’s relationship with the UK, including the single market and the commitment to alignment of regulatory outcomes. This remains a key issue that will continue to impact all of our members and many in the wider financial services sector that rely on PII and related covers.

Membership and Finances

An update with be provided by the Treasurer during the AGM.


As I round off the report for 2020, I reflect that this is the first report in very many years that has not focused on Solvency II. I’m sure focus will return again, not least in the shape of data and links to IFRS 17, in future years. I only wish that Solvency II could fall off the agenda and not be replaced by the challenges of 2020!

Again, it is important that we recognise the contribution of everyone to the association - other Officers, members of the Executive and Chairs of the Committees and forums. Thank you for the invaluable contribution throughout the year.