n common with the financial services sector as a whole, the offshore and cross-border life industry ...
n common with the financial services sector as a whole, the offshore and cross-border life industry has experienced a difficult environment over the last few years.
The major influences have been the worst global investment bear market since the 1930s, increasing regulation across jurisdictions and the impact of market consolidation within the UK market in particular.
Despite these pressures, the offshore life industry has performed well compared to many other investment-related industries and has achieved a credibility and significance perhaps not enjoyed in the past.
In particular, offshore life products are now an important and recognised tax-planning tool for many high-net-worth individuals and their advisers. This is set to continue with many other tax-planning routes being eroded as well as the forecast growth in the high-net-worth population and wealth.
Furthermore, the offshore industry provides products to meet the needs of the growing expatriate population as well as the growing demand within the EU as barriers are slowly removed to facilitate EU cross-border business.
In the light of recent market changes it is appropriate that AILO (Association of International Life Offices) reassesses its role and modus operandi.
AILO was established in the 1980s as a forum where the early offshore life insurers could exchange ideas on issues of common interest facing the industry. In particular, it was successful in challenging the threat from the UK Revenue to personalised bonds.
While AILO has been successful in reacting to issues facing the offshore industry, it is fair to say that it has not historically always been as proactive as it could have been. AILO is a trade association and not a regulatory body, however it is unique in that it is the only body that represents cross-border insurers from a range of jurisdictions including Dublin, Isle of Man, Luxembourg, Guernsey as well as newer financial centres such as Liechtenstein.
With the increasing complexity of the market, particularly within the area of regulation across a wide range of markets, it is important that AILO provides more proactive support to its members.
The main objective of AILO, is to raise the profile of the offshore and cross-border life industry in the media and among regulators, intermediaries and clients. It is important that AILO highlights the benefits of offshore insurance products as well as influencing regulation to ensure it is both effective and consistent across jurisdictions.
A service to provide up-to-date market, regulatory and taxation information is being introduced for member companies. Improved industry statistics are being implemented from the end of this year to provide improved market information to enable companies to better manage their businesses.
Closer relationships are being developed with regulatory bodies to help influence the future of regulation. One of the objectives currently is to persuade financial centres to implement a more consistent approach to anti-money laundering.
We are also looking to develop relationships with other trade bodies to improve communication and co-operation on issues of mutual interest as well as improving the AILO website to aid communication between our members, intermediaries and clients.
Finally we are looking at ways to utilise AILO"s buying power to help reduce costs to members and thereby increase value for money to clients.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till