Reinsurance Transactions for Runoff and Captive Insurance


Captive Use Trends & Innovations | Steven McElhiney | President & CEO | EWI Re, Inc.


Steve McElhiney, president and CEO of EWI Reinsurance, says there are an estimated 7,000 to 8,000 captive insurance companies globally. About one-third of these captives are dormant, meaning they are being used on a limited basis or may be a result of a merger. These dormant captives are not being optimized and often are going along on autopilot. While financials are still being generated each year and ongoing transactions are still being handled, there is a way to unwind a dormant captive through a commutation, a loss portfolio transfer, or an assumption agreement (novation). Such runoff transactions can be employed to release and redeploy risk-bearing capital in support of new business strategies, while freeing up organizational resources, in return for an agreed-on premium. At the end of the day, these runoff transactions help captive owners achieve their objectives.