Captive Insurance Industry and Alternative Risk Transfer Market News

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Considering the Impact of Risk and Pricing in New Product Development

There is likely to be a push by captive insurance company owners and policyholders to cover some of the risks uncovered by the pandemic. But risk and pricing are critical elements in product development, and captives need to ask if they can rate, price, and adjust these risks properly.
September 28, 2020 Read More
Money Light Bulb

In Challenging Times, a Captive Can Provide Balance Sheet Protection

As they deal with the COVID-19 pandemic and the accompanying economic downturn, investment market volatility, and a hardening insurance market, organizations can look to their captive insurance companies to help protect their balance sheets. The captive can open up opportunities for the parent company to retain risk more economically.
September 23, 2020 Read More
Past and Future-SF

Reinsurance Sector Faces Challenges but Is Positioned To Address Them

The global reinsurance industry clearly faces a number of significant headwinds, but offsetting positives justify a stable outlook for the sector, according to A.M. Best. Among the challenges confronting the reinsurance industry is uncertainty over potential COVID-19-related reinsurance losses from specialty insurance classes.
September 21, 2020 Read More
Rachel Seale-Consulting Actuary-Milliman

Actuarial Analysis: A Necessary Exercise with Many Potential Benefits

An actuarial analysis is typically required for companies that retain a significant dollar amount of insurance risk, usually through a self-insurance program or a large deductible program, and is a great way to determine if your company would benefit from a captive.
September 16, 2020 Read More
COVID-19 and Virus Molecule in Magnifying Glass

The Pandemic's Impact on Captives' Short-Range Planning

Numerous reports have examined the pandemic's impact on short-range planning. Here's a look at how those impacts might apply to captives, recognizing that 2021 promises the ability to upend the best-crafted business plans.
September 14, 2020 Read More
Medical-Related Icons Collected in a Honeycomb Shape Surrounded by Floating COVID-19 Cells

Medical Stop Loss Captives Continue To Offer Benefits through Pandemic

The use of captive insurance companies for medical stop loss coverage has increased dramatically in recent years and likely will continue to do so, even as the ultimate impact of the COVID-19 pandemic remains uncertain. Small and midsize employers have benefited from using group medical stop loss captives.
September 09, 2020 Read More
IRS Lettered in Money on Black Background

New Federal Report Examines Possible Micro-Captive Role in Tax Abuse

So-called micro-captives have been in the crosshairs of the Internal Revenue Service for several years. Now, a newly released report from the US Government Accountability Office warns that offshore micro-captives may be used for abusive tax schemes.
September 02, 2020 Read More
Business Card with Word Pandemic Held in Businessman

Captives Serve Owners Well during Pandemic, Future Changes Possible

While the COVID-19 pandemic has hit various businesses and industries differently, captive insurance companies have generally performed well, with many having large amounts of surplus able to help their parent companies deal with difficult financial times. Going forward, many captives will probably review policy language.
August 31, 2020 Read More
Puzzle Piece with the Word Essential Written on It Next to Puzzle with Similar Words

Understanding the Essentials of the CEO/Captive Board Relationship

The importance of good CEO/board relationships cannot be underestimated. The purpose of this article is to look at what constitutes the essential elements of a good CEO/board relationship and how these elements can be adapted to fit the management model employed by a large number of captives.
August 26, 2020 Read More

Recent News

Best Sees Pandemic Highlighting Weaknesses in Insurers' ERM Programs

Businessman Using Tablet To Analyze COVID-19 Economic Fallout Data 
The COVID-19 pandemic underscores weaknesses in insurers' enterprise risk management (ERM) efforts, according to a new special report from A.M. Best. The report notes that while ERM has evolved rapidly, the pandemic has emphasized that "unknown unknowns" and "unexpected accumulations" that can affect insurers and reinsurers remain.
September 29, 2020 Read More

Vermont Names Brittany Nevins to Captive Economic Development Post

New Job Written on a Blue Key on a Gray Computer Keyboard 
The Vermont Agency of Commerce and Community Development has named Brittany Nevins captive insurance economic development director. Ms. Nevins replaces Ian Davis, who left the position earlier this year to take a private sector position in the captive insurance industry.
September 29, 2020 Read More

New White Paper Focuses on Pandemic and Captives

Advertisement—Click here to download the free report on COVID-19 Pandemic Opportunities and Implications for Captive Insurance and International Risk Management Institute, Inc., have created a special 12-page report examining the COVID-19 pandemic's implications for the captive insurance industry. The new white paper, "The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance," is available free to "Captive Wire" subscribers.
September 28, 2020 Read More

AXA XL Names Jonathan Salter Head of Risk Consulting

A businessperson 
AXA XL has named Jonathan Salter head of Risk Consulting, effective October 1, 2020. In his new role, Mr. Salter will drive AXA XL's Risk Consulting’s global strategy and value proposition, working closely with AXA XL's underwriting and claims teams. Mr. Salter is currently deputy CEO of AXA XL Risk Consulting.
September 25, 2020 Read More

RMS Says Insured Losses from Western US Wildfires Could Hit $8 Billion

Wildfire 480x377 
Catastrophe risk modelling firm RMS estimates that insured losses from wildfires in the western United States will be between $4.0 billion and $8.0 billion. RMS said the projected losses reflect estimates as of September 20, 2020, and indicated that the losses are likely to increase as many fires are still ongoing.
September 25, 2020 Read More

AIR Estimates Hurricane Sally Insured Losses at Up to $3 Billion

Beach house damaged by hurricane 
Catastrophe risk modeling firm AIR Worldwide estimates that Hurricane Sally caused $1 billion to $3 billion in insured onshore property losses as a result of wind, storm surge, and inland flood. Wind was responsible for the majority of the losses, AIR said.
September 24, 2020 Read More

October "CICR" Explores D&O Liability, Captive Taxes, COVID-19

Captive Globe-SF 
Don't miss the October issue of "Captive Insurance Company Reports" ("CICR"), in which John Thomson, editor, provides an insightful commentary on the continued hardening of the market, the interminable COVID-19 pandemic, and the Vermont Captive Insurance Association's first-ever virtual conference.
September 24, 2020 Read More

Captives Will Step in If Insurers Label Pandemics "Uninsurable"

A pair of headphones with a line between the earpieces to show sound and the word Podcast written at the bottom 
Commercial insurance companies should not be surprised to see buyers reduce their premium spending across lines if they continue to tap out of difficult-to-insure risks like pandemics, Zach Finn, clinical professor of risk management and insurance at Butler University, tells Richard Cutcher in episode 38 of the Global Captive Podcast.
September 23, 2020 Read More

DC Captive Group To Present Annual Conference Online October 27

Silhouette of woman standing and talking to three silhouettes of people with virtual background 
The Captive Insurance Council of the District of Columbia Inc. has rescheduled its annual conference for October 27. The new conference, unlike the originally planned May conference that was canceled in late March due to the COVID-19 pandemic, will be held online.
September 22, 2020 Read More

Fitch Removes Lloyd's from Rating Watch Negative, Affirms AA- Rating

A businessman 
Fitch Ratings has affirmed Lloyd's of London's insurer financial strength (IFS) rating at AA- (very strong) and removed Lloyd's from Rating Watch Negative. Fitch's outlook for Lloyd's is stable. The affirmation of the AA- IFS rating primarily reflects Lloyd's very strong business profile and capitalization and leverage, Fitch said.
September 22, 2020 Read More

Survey Finds Market Conditions Leading to More Captive Formations

A woman on a laptop taking an online survey 
Amid tightening conditions in the commercial insurance market, more organizations are forming captive insurance companies, according to a new Marsh LLC survey. That increase in captive formations comes amid a surge in the amount of business funded in 2019 through captives.
September 21, 2020 Read More

Report Cites Importance of Insurance in Natural Disaster Recovery

A graph with several downward trends over a digital map of the world 
The average annual losses from natural catastrophes have increased dramatically in recent years, but the increased amounts of insurance penetration can have a dramatic impact on recovery time. A new report notes that average annual catastrophe losses rose from $27 billion in 1970–1980 to nearly $200 billion in 2010–2020.
September 18, 2020 Read More

Industry Well-Capitalized for Catastrophes but Further Price Hikes Likely

Natural Disasters 480x377 
A new report from Kroll Bond Rating Agency suggests that the (re)insurance industry remains sufficiently capitalized and is generally well-positioned to manage through current catastrophes, including hurricanes, wildfires, and the COVID-19 pandemic. The continuing increase in hurricanes' severity will lead to another year of high catastrophe losses for insurance companies.
September 18, 2020 Read More