In 2010 the introduction of the new income tax act meant that all companies in Gibraltar had to pay 10% in corporate tax. From being an offshore finance centre Gibraltar was now an onshore EU finance centre. Gibraltar is unique in the fact that it is part of the EU with exception from the common customs tariff, the Common Agricultural Policy and VAT rules. Despite global economic slowdown the Gibraltarian economy grew by 11.4% during 2009−2010 and by 5.2% during 2010−2011. Accordingly, the insurance industry grew by 12.3% in 2012 with gross written premiums totalling GBP£3.6 billion.
Things are looking bright for the Gibraltarian motor insurance market
Growth in the UK’s automotive market has sparked Gibraltarian motor insurance. Accounting for 10% of the total UK motor insurance market means a larger share than Lloyd’s of London, traditionally a key insurer in that area. Timetric predicts the motor insurance category to grow at a projected CAGR of 14.1% towards 2017.
Solvency II norms
According to Timetric’s forecast report on the insurance industry in Gibraltar, the implementation of the Solvency II legislation in 2015 will have an impact on the solvency ratio of insurance companies which will result in higher capital requirements. The industry is expected to undergo a period of consolidation, as mergers and acquisitions will increase towards 2017. Disciplined underwriting, a lower expense base and cost-effective sales platforms will remain critical success factors for the industry going forward.
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