This is a young flag: was created in 1985. This is a mix of St. George's flag, that was being used since 1936 as state flag (I don't know how the College of Arms and similar organs allowed it), with a old Norman cross, used by William the Conqueror, in the center. You can see below a deduction of how William's banner looked like:
This flag was created because Guernsey's St. George's cross was confused with English St. George's Cross, for example, at sportive competitions — it's obvious, they used the same flag!
The result, as you can see, was very good. The Guernsey flag is distinctive, easily memorized and good-looking. And it has, definitely, a pretty medieval look to a flag from 1985.