The first Japanese owned reinsurance company to set up business in the Isle of Man has just received its licence to operate from the Insurance and Pensions Authority. Tokio Marine Bluebell Re Limited has been established by Japan’s Millea Holdings in association with JP Morgan and is being administered by LCL Group’s Life Division headquartered in the Island.

The substantial new operation is capitalised at Yen 10 billion – around £40 million – and will offer reinsurance covering variable annuity insurance business by a company within the Millea Group.

Its incorporation also marks the first life reinsurance company to be administered in the Isle of Man by a major international life assurance and third party provider. The LCL Group specialises in developing effective risk transfer solutions and its local operation, LCL Services (IOM) administers life and pensions businesses on behalf of clients as well as LCL-owned companies. Clients include Scottish Widows International and Global Life Assurance.

Major new names

The announcement follows the arrival of another major name in the Island’s finance sector. BNP Paribas – France’s biggest private bank and one of the world’s leading financial institutions – will now have a presence in the Isle of Man through its acquisition of RBS International Securities Services (Holdings) Limited. The Island is also now host to most ‘Top 100’ non-UK companies listed on London’s Alternative Investment Market.

The Japanese business was won against considerable international competition from other financial centres. Millea, the parent company of Tokio Marine & Nichido Fire and Nisshin Fire & Marine, had considered several other jurisdictions around the world before opting for the Isle of Man.

LCL’s Manx subsidiary originally administered only LCL interests but has since developed into a significant provider of third party services for the life insurance sector. Its Chairman, Stuart Fairclough, said the Island’s existing regulatory framework and quality business environment had been deciding factors in securing the company.

Greatest skills base

‘The Isle of Man remains the biggest player in the international life market and consequently has the greatest skills base of almost anywhere else in the world,’ pointed out Mr Fairclough. ‘It is also an experienced centre for captive insurance and therefore already has the regulatory framework in place to handle this type of complex reinsurance business and offers the company a secure working environment.

‘The Isle of Man also has fair value accounting rules which suit Japanese companies operating in this specialised area of the market in that it allows them to reflect fair value for the assets they are holding in their business. And crucially, we also have the necessary actuarial and financial expertise available here on the Island to handle this calibre of reinsurance work.’

LCL Services (IOM) was appointed at the beginning of February from which time it has prepared the application to the IPA, set up the company and obtained authorisation all in under three months: ‘In view of the complexity of the business, I believe this could not have been matched elsewhere. Being able to achieve this was another factor in the Japanese opting for the Isle of Man – and is again a reflection of our expertise and the responsiveness of the IPA and their actuarial advisers,’ added Mr Fairclough.

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