Credit Suisse has established itself as a leading provider to the Caribbean's captive insurance sector, providing letters of credit (L/Cs) worth US$2.5 billion.

Captive insurers, which are wholly owned and controlled by those insured, use the L/Cs as collateral for reinsurance contracts struck with large US insurers.

Market gap

Credit Suisse has substantially established its position in the market by filling the gap left in late 2014 when Royal Bank of Canada (RBC) said it would withdraw from the Caribbean in 2015.

The Canadian bank said it would also be running down its huge portfolio of L/Cs for captive reinsurers.

Leading position

One of the first to replace RBC with Credit Suisse was Illinois-based specialist insurance consultant Captive Resources.

It first obtained L/Cs from Credit Suisse in the first quarter of 2015 and as its business has grown, it has obtained 19 more L/Cs and increased its captives' coverage to US$1.6 billion.

Since late 2014, Credit Suisse has grown its L/C business fourfold, establishing it as the market leader.

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