Eamon O'Brien traces the growth of Dublin from small beginnings into a developed market providing virtually all types of insurance and reinsurance products to the international buyer.
In the mid 1980s, the concept of an International Financial Services Centre (IFSC) in Dublin was but a seed germinating in the minds of senior politicians and entrepreneurs. By 1987, with the necessary legislative framework in place and the European Union already moving towards the harmonisation of insurance regulations, IDA Ireland, the Irish government's marketing agency, had already begun its development efforts in earnest.
When BMW was officially announced as the flagship captive insurance project, the world started to sit-up and take notice . . . what is going on in Dublin? By then, the seeds had been well sown for an international financial services centre whose recorded business for premium written exceeded IR£3.2 billion in the year ended 1997. The 1998 figure is expected to be close to IR£4 billion when the final figures have been collated.Initially, the IDA targeted companies for Dublin as a captive centre only, and today, the IFSC is home to in excess of 150 captives, including many large, direct writing captives for multinational companies with significant European exposures. The Dublin Insurance Managers Association (DIMA) was formed in 1990 to address issues of relevance to the development of the captive industry.
It became obvious at an early stage, however, that it was not only the captive community that was interested in utilising Dublin's unique combination of direct access to the EU member states and favourable corporation tax rate combined with an expansive range of double taxation treaties. Major, higher layer insurers, such as XL Europe, and a wide range of international reinsurers such as Cologne Re, Hannover Re, Bavarian Re, QBE and Centre Solutions were quick to spot the advantages that Dublin had to offer and established their businesses here.
In 1994, recognising the change in profile of membership and their needs, DIMA expanded its title to the Dublin International Insurance & Management Association. DIMA currently acts as a representative association for almost 200 non-life insurance and management companies based in the IFSC. Today, captives are but one of a large range of insurance services that Dublin has to offer to the international market.
To expand further Dublin's business and reputation on the international stage, industry and the government representatives combined to commission an independent report by the international firm of consultants, Tillinghast Towers-Perrin, on the whole non-life insurance and reinsurance sector in Dublin. This report was titled Dublin as a centre for International Insurance and Reinsurance - a Marketing and Development Plan.It provided the government, and ourselves as the IFSC's practitioners, with the basis upon which to negotiate for a dedicated resource for the marketing of the non-life sector in Dublin, a position now filled by David Smith in his role as international insurance representative. His role will focus efforts in the future as we strive to promote Dublin and enhance our reputation internationally.
The department of the Irish prime minister (the Taoiseach) has always had a keen interest in the development of the IFSC. The government's “talk shop”, the IFSC committee was established in 1987. Under the auspices of the Department of the Taoiseach, it provided industry practitioners, leading legal and taxation advisors and senior government officials with a working forum to discuss areas of concern and mutual interest. In 1993, the government split the IFSC committee into a clearing house group and three working groups for banking and treasury, funds and insurance.
The role of the insurance group is to assist the further development the life and non-life insurance and reinsurance sectors of the IFSC. The government is represented by officials from departments of the Taoiseach, Enterprise, Trade & Employment (the regulator's office) and Finance. Industry is represented by major players in each of the life and non-life insurance sectors (including direct insurance, reinsurance and captive management). Issues of common interest are openly debated and new products and industry developments reviewed. The openness of the government representatives in working with the industry members is refreshing. That, however, does not mean we always get the answer we are looking for!
The IFSC insurance group, and those relating to banking and treasury and funds, have the continued active support of the Taoiseach, which ensures that relevant issues get immediate attention at the highest levels in government. Having been minister for finance during much of its development phase, the current Taoiseach Bertie Ahern maintains a personal interest in the development of the IFSC. In particular, his interest extends to the workings of these committees, emphasised by the fact that the various IFSC groups continue to report directly to his department.
Three words summarise the reasons for Dublin's success to date and the abiding principles that will ensure it continues . . . quality, flexibility and sustainability. We aim to keep it this way.
Eamon O'Brien is chairman of the Taoiseach's IFSC insurance group and is managing director of Aon Insurance Managers (Dublin) Ltd. He is also a past chairman of DIMA. Tel: +353 (0) 1 676 2911; fax: +353 (0) 1 676 2744; e-mail: Eamon_obrien@aon.com