Captives Might Be Perfectly Positioned To Benefit from Technology

Man holding hologram of technology components

June 15, 2021 |

Man holding hologram of technology components

While traditional insurance companies' adoption of technology has typically been incremental, captive insurance companies might be particularly well positioned to take significant advantage of technological innovation, according to a panel of experts.

Speaking on the first day of this year's virtual Bermuda Captive Conference Monday, David Mocklow, head of strategy and corporate development at Gramercy Risk Management, said, "I do believe the captive industry is entering a period where they can take advantage of a much more digital world."

Mr. Mocklow spoke as a participant on a panel discussing "Captives & Technology."

While it is still the early stages of applying technology to the insurance process, there are developments that can make it easier to analyze and use the data the industry generates and apply it to business processes, Mr. Mocklow said.

"I see the benefit of being able to take all of the data and analytics and organization and workflows we've been talking about.... We can take those processes and utilize some of the other features of blockchain technology," said another panelist, Nina Kilbride, founder of Mothership.

Smart contracts, for example, could not only increase claims management efficiency and improve the use of analytics but also open the door to new ways to use data to manage risks, Ms. Kilbride said.

Because of their structure and the technological sophistication of their parent companies, many captive insurance companies might be better positioned than traditional insurers to take advantage of some of those developments, Mr. Mocklow said.

"It's been my experience that the traditional insurance industry has been somewhat reluctant to adopt certain technology and changes to their business," he said. "If I'm a captive, I have a big advantage over my traditional insurers. I'm probably more digitally savvy anyway."

"I actually think captives can become more of the innovator in partnership with very good insurance companies," Mr. Mocklow said. "I think captives can be places where this innovation is driven."

Jen Blair, global risk and insurance manager at Bose Corporation, also participated on the panel. Richard Cutcher, executive producer of Global Captive Podcast, moderated the session.

June 15, 2021