Captive Insurance News

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  • Reinsurance Sector Won't Earn Cost of Capital in 2020 Due to COVID-19 The global reinsurance industry will fail to earn its cost of capital in 2020 due to the impact of the COVID-19 pandemic, according to Fitch Ratings. Fitch noted that the COVID-19 crisis comes after 3 years of heightened natural catastrophe losses and increasing US casualty claims.
  • COVID-19 Pandemic Slows Pace of Captive Insurance Law Updates While the COVID-19 pandemic has slowed state legislatures' updates of their captive insurance statutes this spring, some states have moved forward in 2020 and passed captive legislation. In other captive domiciles, state lawmakers did not complete action on captive legislation before adjourning.
  • Legislation To Create TRIA-Like Federal Pandemic Backstop Introduced A bill that would create a federal pandemic risk backstop has been introduced in Congress. Rep. Carolyn B. Maloney (D-NY), senior member of the House Financial Services Committee, introduced H.R. 7011, the Pandemic Risk Insurance Act of 2020, on Wednesday.
  • US Property-Casualty Market Hardening Continues in First Quarter: CIAB Commercial property-casualty insurance markets continued to harden in the first quarter of the year, with some lines seeing their largest increases since the September 11, 2001, terrorist attacks, according to the Council of Insurance Agents & Brokers (CIAB). Premiums increased by an average of 9.6 percent in the first quarter.
  • FERMA Seeks EU Financial Resilience Framework for Catastrophic Risks The Federation of European Risk Management Associations (FERMA) has called on the European Commission to create a European Union business interruption resilience framework for catastrophic risks. FERMA called on the commission to address the "severe shortage" of business interruption insurance for disruptions that don't involve physical damage.
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  COVID-19 and gold arrow zigzagging and pointing down

Lloyd's Projects Industry COVID-19 Underwriting Loss at $107 Billion

The Lloyd's market says that it anticipates paying out up to $4.3 billion as a result of COVID-19, while projecting $107 billion in overall industry underwriting losses. Lloyd's said the industry's projected $107 billion in COVID-19 losses are on par with some of the biggest major claims years for the industry.
May 15, 2020 Read More
  Hand holding globe with face mask on it on top of pile of dollar bills

Actuaries Group Offers Guidance on Federal Pandemic Risk Backstop

The American Academy of Actuaries has suggested that existing US insurance backstop programs may provide insights into crafting a pandemic risk backstop. Those programs help the insurance marketplace provide coverage by capping the risk the market is expected to handle and providing a federal backstop for losses exceeding that cap.
May 15, 2020 Read More
  A businessman

Treasury Voices Concern over Legislation Forcing Pandemic BI Coverage

In a letter, the US Treasury Department has indicated its concern over legislation forcing insurers to pay COVID-19 pandemic-related business interruption (BI) claims when policies exclude the risk. The letter says insurers should pay valid claims, but forcing insurers to pay excluded claims conflicts with contractual obligations.
May 14, 2020 Read More
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Commercial Market Hardens but Pandemic To Delay Insurer Profitability

The COVID-19 pandemic will hit commercial insurers hard, and most may only return to technical profitability in the second half of 2021, assuming normal levels of catastrophe losses, according to Fitch Ratings. Fitch also said it expects continued rate hardening in the commercial insurance market.
May 14, 2020 Read More
  Joel Chansky - Consulting Actuary at Milliman

How a Captive Insurance Company Can Save Money for Its Owners

Joel Chansky, consulting actuary with Milliman, explores the question of whether captives save money. The answer is yes and no. Group captives are intended to save money. Owners of single-parent captives face start-up and annual costs, but the captive could provide tax savings and even a profit center.
May 13, 2020 Read More
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New Aon Underwriting Platform Focuses on Intellectual Property Risks

Aon has launched a new underwriting platform offering what the company says is the largest known delegated capacity for intellectual property (IP) liability risks. In 2018, Aon announced the development of an insurance facility providing $100 million in capacity for IP infringement liability exposures.
May 13, 2020 Read More
  Dollar bills viewed through magnifier with graph in background

COVID-19, Economic Downturn Likely To Extend Hard Market: Willis

The COVID-19 pandemic and the economic downturn will likely extend a hard commercial insurance market for North American buyers through 2021, according to Willis Towers Watson. North American commercial insurance buyers will continue facing upward pricing pressure across most insurance lines, along with newfound scrutiny of coverage terms and conditions.
May 12, 2020 Read More
  Man holding globe with COVID-19 virus around it

IAIS Monitoring COVID-19 Impact on Global Insurance Sector

The International Association of Insurance Supervisors (IAIS) says it is monitoring developments and working with other standard-setting bodies to asses the impact of the COVID-19 pandemic on the global insurance sector. The IAIS stressed the importance of the insurance industry to provide protection against the heightened uncertainties created by the pandemic.
May 12, 2020 Read More
  The Word Legislation Surrounded by Question Marks

Pandemic BI Bills Pose Existential Threat to Insurance Industry: Best

Legislation that would nullify business interruption (BI) exclusions in existing US insurance policies would pose an existential threat to property-casualty insurers, according to a recent commentary from AM Best. In the United States, most commercial insurance policies exclude losses caused by communicable diseases or viruses.
May 11, 2020 Read More
  Hands on a Laptop Keyboard Surrounded by Data Asset Icons

New Structures, Technology, Captives May Help Cover Intangible Assets

Though intangible assets are becoming an ever-growing part of many companies' value, there are significant disconnects between the way many organizations approach coverage of their tangible and intangible assets. Addressing those growing exposures could be a function of parametric coverage designs, new technology, and captive insurance structures.
May 11, 2020 Read More
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