Market view: Graham Smart, executive director, MYI

Gibraltar has long been an important and strategic trading location, given its position as the gateway between the Atlantic Ocean and Mediterranean Sea and the landmasses of Europe and Africa. Who has not heard the phrase 'safe as the rock of Gibraltar'?

Marine trade has played a huge part in the success of Gibraltar and continues to do so, with development into specialist areas such as 'fuel bunkering' where vessels use Gibraltarian waters as a refuelling point.

In recent years, Gibraltar has turned its focus to financial services and is now a base for insurers, brokers, investing institutions and gaming companies. The opportunities are very real and numerous in terms of its positioning as a world-renowned financial centre.

Gibraltar is growing fast, not just in economic terms, but also physically as land reclamation projects to accommodate new residential and commercial complexes appear around the coastline and substantial tracts of land are recovered from the sea.

The changes in Gibraltar have undoubtedly altered the needs of insurance buyers with more sophisticated coverage being required, especially in relation to what are significant capital investments and ever-growing and more sophisticated business projects.

In addition to the standard material damage covers, developers are seeking protection for new schemes through the purchase of advance loss of profits and rents covers. The general world pressures on capital make this more vital than ever, with lenders no doubt making covenants more onerous to protect their investments.

At SME level, the importance of business interruption coverage is no different and extensions to cover (denial of access, loss of attraction and suppliers extensions) are vital to protect business, especially those with a reliance on imports from overseas. This applies equally to retailers on Main Street as it does to the larger businesses that maintain the infrastructure and Gibraltar supply chain, which rely heavily on imported manufactured resource, often at a premium cost.

Exposure to imports from outside the European Union brings with it risk as EU consumer protection laws place a backstop of responsibility for product liability claims with the first importer to the EU. While, contractually, there may then be a recovery from the manufacturer, cross-jurisdictional actions involving manufacturers in developing countries are notoriously difficult to prosecute. In this respect, product liability cover is also key.

Experience of the Gibraltar market has shown sophistication at both insurer and broker level with a desire for independence from the London market, both from an underwriting and claims perspective. There is a will to retain risks in Gibraltar, albeit with perhaps more specialist lines reverting to the London market, where underwriters with sound local knowledge and understanding can reinforce the local capability.

From a claims perspective, the development of Gibraltar presents many interesting challenges for adjusters with a broad spectrum of technical claims emanating from the multiplicity of commercial interests there. In particular, the storms in the autumn of 2008, generated a number of complex cases, many of which MYI is involved in handling.

The recent establishment of the Gibraltar Insurance Institute has demonstrated the local commitment to the enhancement of technical expertise and at junior level and it is gratifying to find a desire for technical training coupled with recognition that insurance is a career and not just a job. Gibraltar continues to produce a steady stream of well-educated youngsters, looking for ways to couple their Gibraltar heritage with a meaningful career" something that utilises their educational achievements, invariably topped off by a UK university degree.

The burgeoning insurance industry provides an ideal vehicle as this important component of the commercial world grows in size and complexity in Gibraltar. This is not only essential for the continued well-being of Gibraltar but is refreshing indeed and something we are delighted to support.