Message from the Chairman

Having taken the role as Chair at last year’s AGM, I look back at past Chair’s reports for inspiration and note a strange dichotomy whereby the changes seems stark yet the challenges seem almost identical over the years, which reflects the reality of the deep changes we have felt over the past few years and the profound impacts that we face and continue to address.

Solvency II, which has been live for over four years now, continues to challenge as we now find ourselves with the reporting timeframes squeezed while market participants and users of the reports we produce continue to evolve in how they read, interpret and judge these. 

Brexit, which again has been over four years since the referendum was announced, continues to dominate the media and in strategic decision-making forums everywhere with no real clarity on the implications either for our sector or elsewhere.

And our regulator is undergoing change as well with the restructure announced, in order to reduce costs, streamline the organisation and widen the management structure, which are all aspects which various GIA Executive bodies have encouraged over (at least) the last four years.

On reflection, we should always remember that change (and especially the pace of change) is an increasing fact of life, and as such the busiest day of the week will always be tomorrow.

There have been very many positives as well. Work continues on the long overdue IT infrastructure which has made communication and engagement difficult and we will update on progress on this at the AGM. Furthermore, there has been good dialogue on a number of matters primarily with the GFSC, but also with other key groups such as Government and the ABI.

Given that tomorrow will be the busiest day of the week, I expect much of the same lies in store for the GIA Chair through 2020!

Shaun Cawdery


I start where I most fear to go, the subject of Brexit.

While UK Prime Minister,Mr Johnson, would like to pretend that Brexit was done on 31 January 2020, it is clear to those of us trying to strategise into a post-Brexit world that it is anything but done. Key questions have not even begun to be asked, let alone answered, by those in control of the negotiation process between the UK and the EU. For example, will the UK be granted equivalent status under Solvency II? While informed opinion suggests that this may be so given that the regimes in the EU and UK are identical (and lobbying from industry indicates a preference for equivalent status), one cannot be certain given the UK government is currently parading the benefits of regulatory divergence from the EU. Even so, will the UK Government maintain its long-standing position that Gibraltar must be included in any eventual deal with the EU, or will it succeed to pressure from Madrid to exclude Gibraltar?

While the past year has made some of the questions a little clearer, we still seem an awful long way from having any answers.

Locally, the Government has transposed the elements of the Withdrawal Agreement into local law via the European Union (Withdrawal Agreement) Act which maintains prevailing EU regulations throughout the transition period, and therefore we have some certainty over the course of 2020.

Companies should by now have their immediate Brexit mitigation plans either finalised or in full swing, but even the best laid plans will almost certainly have aspects that still need to be addressed during the transitional period and beyond. For many there will be plans to run off EU portfolios and firms should be engaging both with the GFSC and the host state regulators in respect of these run off portfolios. Local EU member states are likely to impose differing legislative regimes to manage run off portfolios and therefore companies will need to ensure that they are abreast of these in good time in order to ensure compliance from 1 January 2021 (or whenever the transition period ends).

For the majority of members whose business is in the UK, the position is somewhat simpler since Gibraltar is not part of the UK’s Temporary Permissions Regime and the single market between Gibraltar and the UK seems to be assured. Even in these simpler cases those, strategising into an uncertain Brexit world has significant challenges – issues around green cards seem to be well understood; but what for the potential for future impact of UK customs delays on getting motor vehicle parts to UK dealers, potential tariffs thereon increasing claim severity, impacts of potential exchange rates which are possibly going to be volatile?

Are there benefits to Brexit? Of course there will be (else what’s the point of Brexit?) and I’m sure 2020 will show us at least the direction of trade negotiations with other parts of the world, but agreement with the EU will be key to this since other countries are likely to be looking with interest to see if there are benefits to be gained from invoking mostfavourednation clauses in trade agreements before committing themselves to the UK (and Gibraltar).

I’m quite certain that the subject of Brexit will be very high on the Chair’s 2020 Report as well.

Solvency II

As you will know, Solvency II deadlines are being squeezed for the last time in 2020, which continues to puts significant pressure on insurance companies in respect to annual reporting. On the positive side, the reporting dates are largely fixed every year from now on so hopefully we can stop counting the number of Fridays from 31 December to work out the reporting dates (or was that just me…?).

The changes to the Delegated Regulations resulting from the 2018 interim review are now fully effective. While some insurers may see benefits from the changes (for example the adjustment to the calculation of FP(future) should decrease the premiums volume measure), others may see a significant negative capital impact (for example those writing business in credit and surety class and/or deferred premium legal expenses). The interim review also makes changes to the disclosure requirements in the SFCR and RSR in a number of areas.

As we look forward, EIOPA shall be undertaking a much larger scope 2020 review of the Solvency II Directive, which we can expect an opinion to be published in June with the potential legislative proposal due at the end of the year.

Regulation and Legislation

The key change during the year was the introduction of the Financial Services Act 2019, with all the supporting regulations resulting from the Legislative Reform Programme coming into effect on 15 January 2020. While the key areas of the reform programme have been available and consulted on for some time, Government remains mindful that this is a major changes and that there may be some areas of the legislation that needs refining, and therefore all members are urged to communicate any continuing concerns that they have with the Financial Services Act 2019 and related regulations.

The Industry’s engagement with the GFSC has been positive throughout the year, with a significant number of discussions and consultations taking place and the regular meetings with the GFSC executive teams being productive in highlighting and resolving any concerns that members have. One area of contention during the year was the GFSC proposal to sit in on board meetings of insurers, and after engagement with the GFCC and the Government on this matter, the GFSC listened to members concerns and we have since been working with the GFSC to ensure that they can meet their objectives via other means.

During the year, it will not be news to anyone that there have been two key events involving the GFSC. Firstly, the appointment of Kerry Blight as a replacement to Samantha Barrass in the Summer has changed the tone from the GFSC to one that is more empathetic with the challenges of the industry which has been welcomed by the GIA Executive. That being said, there has been a focus on the regulator maintaining its tough stance on seeking to prevent failures. Secondly, and as mentioned earlier, the GFSC announced its restructure in order to streamline the organisation, reduce costs, and widen the management team. This initiative is one that should be welcomed by the industry, not least since the growing cost base of the GFSC has been a concern for some while. While it is probably no secret that the loss of some of the GFSC staff may not be missed by a small fraction of our members, I would like to pay thanksparticularly to those senior members of staff whose engagement with the GIA has been positive throughout their time at the commission.

On the subject of preventing failures, there have been a number of firms ceasing to trade or entering administration in 2019 or in the early weeks of 2020 for various reasons. The demise of Lamp Insurance Company Limitedin particular hascreated negative publicity for the jurisdiction and has resulted in costs to the FSCS in the UK, as well as impacting guarantee schemes and/or policyholders in EU countries. One sincerely hopes that the other companies that have ceased trading and gone into administration are able to run off their exposures in a solvent manner. 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 and one that should be closely protected by us all as key stakeholders.

Quite rightly in my opinion, the GFSC is placing emphasis on insurers plans to manage a run-off scenario. While this may seem unduly intrusive at times, this is something that directors should be asking of their management teams in order to protect their policyholders and themselves. As we are all stakeholders in the future of Gibraltar plc, we should also be encouraged that the GFSC is looking at the credibility of insurers run off plans in order to avoid the negative press that we are all tarnished with in the event of an insolvent insurer failure.

We expect continued positive engagement with the new look GFSC to continue into 2020 and beyond to further our joint objectives of a business friendly and pragmatic yet ultimately robust supervisory regime, which is the key to attracting new business to Gibraltar in a post-Brexit world.

Thematic Reviews

2019 saw the GFSC undertake a number of thematic reviews, including on corporate governance, internal audit and actuarial functions. Into 2020 and we see an ongoing focus on corporate governance more specifically in relation to solvency reporting. While as an industry I believe we should support the GFSC’s drive to understand and improve these areas, it is perhaps the latter which is lacking as many members have received little or no feedback on the 2019 Thematic Reviews. We shall push the GFSC to ensure that there is appropriate feedback on these.

Insurance Management

The insurance manager model continues to remain an important aspect of the Gibraltar insurance market. During 2019 three new insurance licenses where issued in Gibraltar and all of these firms operate under a manager model. Several jurisdictions have published guidelines around economicsubstance and in Gibraltar a local process has started to establish a framework for what is referred to locally as ‘Head Office Requirements’. Members of the insurance manager segment and other industry participants look forward to continuing to work with the relevant stakeholders to ensure an appropriate head office framework is developed to allow the jurisdiction to continue to attract new firms with the appropriate governance structures. 

Despite the uncertainties around Brexit, insurance managers have reported that they continue to receive enquiries from firms looking to establish an insurance entity in Gibraltar.


Intermediaries continue to face very similar (and in some cases more pronounced) challenges as insurers as they bed down operational practices resulting from the implementation of IDD and GDPR in 2018. In recent years the engagement from intermediaries with the GIA has increased significantly, particularly due to the Executive members from intermediaries who continue to play a valuable role to ensure all areas are represented.

Association of British Insurers

The Motor Forum in particular continues to enjoy a close connection to the ABI. We continue to encourage members to speak to us about how we can better work with the ABI in other areas.

While writing, ABI members should be aware that the ABI has space available at its offices in London for members to utilise – this is a great way to get out of the cold and rain and enjoy a coffee in between meetings, or have an informal meeting. Perhaps catch up with the ABI team while you are there.

Membership and Finances

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


Solvency II, Brexit and Regulatory/legislative changes again dominate the update this year, just as that have done in recent years past. Yet despite the challenges seemingly being static, the pace of change certainly has not. Whether positive or otherwise, this period of history will likely be one that is considered temps immemorial. That being said, if it is true that tomorrow is the busiest day of the week, then perhaps we better strap in for the ride, wherever it takes us.

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.