In this Mid Rivers Risk Forum 2025 conversation, Dr. Michel Leonard, chief economist and data scientist at the Insurance Information Institute (Triple-I), discusses how economic and social factors are reshaping risk capacity and the role of captives in a hardening market. Dr. Leonard explores how inflation, legal-system abuse, and extreme-weather events challenge traditional diversification models and drive innovation in risk financing. He highlights the importance of collaboration between economists, actuaries, and risk managers to quantify emerging risks and maintain economic viability across insurance segments. Dr. Leonard also underscores the growing value of parametric solutions and the critical capacity role captives play in supporting affordable coverage for businesses and communities.