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Tuesday, 23rd April 2024
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Great opportunities in the Dublin captives market Back  
The captive insurance sector in Dublin is continuing to grow due to an evolving regulatory system, and Ireland’s location in Europe says Paul Cotter. It now offers great opportunities for captive managers.
What has Dublin in common with Bermuda, the Cayman Islands and Luxemburg? Not a lot you might think but in fact they are all linked because they are among just nine main captive market centres in the world. Dublin’s rise to being a leading financial services centre has been dramatic and started with the establishment in 1987, of the IFSC. The IFSC is now recognised throughout the world as a significant world financial services centre and is viewed as a major success story. It is one of the most tangible manifestations of the favourable economic environment and ‘Celtic Tiger’ phenomenon being experienced in Ireland over recent years.
Having opened its doors to captives in 1987, Dublin has made considerable strides over the past 15 years and the number of insurance captives in Ireland continues to grow. The figures rose from 166 at the end of 1999, to 173 by the end of 2000 and by July 2001, a further three captives had set up in Ireland including Golden Arches Reinsurance, Ford Financial Company Limited and Sea Containers Ltd. Licences have also been granted to Overseas Partners Ireland Limited and to Lincoln Re.
Just as significant as the total numbers, is the pedigree of the owners, many of whom are internationally known corporations. Ireland offers unique opportunities to overseas companies establishing captives. Already a well established base for over 1,100 overseas manufacturing and service companies, these companies have been attracted by Ireland’s competitive advantages, which are: a pool of young, qualified English speaking graduates with experience in the financial services industry, a highly competitive labour and operating costs, state of the art digital telecommunications and substantial Government support.
Around 3,500 people are directly employed in the IFSC and the captives sector accounts for one-third of all IFSC operations. While the EU-approved tax rate of 10 per cent proved attractive to companies establishing here, the primary consideration for Dublin captives has been the close proximity to EU countries in which they may maintain operations, and the resulting control of insurance programs there. This is particularly true of US companies, whose 32 captives comprise Ireland’s biggest market.
The relatively new existence of the IFSC means that European corporations that once may have considered Bermuda or the Cayman are increasingly likely to choose somewhere closer to home. The Irish regulatory system has continued to evolve. Previously, no reinsurance business was permitted in a direct writing company, and latterly a small proportion was allowed, provided the class was already being written on a direct basis. Now captives can mix unrelated reinsurance in their direct writing captive, but with constraints on volume. Recent changes in UK CFC legislation have also increased Dublin’s attractiveness to UK corporations that previously might have considered the Isle of Man or Guernsey. Ireland also provides access to a network of 28 tax treaties.
There are many other reasons why you might consider coming to live and work in Dublin. The City has been ranked 35th in a ‘quality of life’ survey of 215 cities worldwide. The survey, by Mercer Consultants, placed Dublin before cities such as London, New York, Rome, Boston and Madrid. Mercers calculated the ‘Quality of life’ with a detailed evaluation of 39 key factors including political stability, medical and educational services and recreational facilities.
So for those ex-pats who have developed their captive skills overseas, this is probably the first time ever that you can now seriously consider coming back to Dublin to live and work using the experience you have gained abroad. There are many opportunities for captive managers at all levels, especially those professionals who have experience of developing accounts, as well as for captive underwriters and accountants. And remember even though Dublin can never compete with the likes of Bermuda and the Cayman Islands for the sun and sea it is still the home of Guinness and was recently voted the ‘best golfing city in the world’ by ‘Golf Journal’!

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