13 June 2019Analysis

Captive owners would not hesitate in choosing Bermuda again

Captive owners gave a ringing endorsement of Bermuda yesterday – saying they would have no hesitation in picking the Island again.

David Erickson, senior vice president at Covenant Retirement Communities, Jennifer Blair, global risk insurance manager, Bose Corporation, Kathryn Henshue, vice president at FAC RE. and Scott Reynolds, president and CEO Member Insurance, were speaking during a panel discussion on day two of the Bermuda Captive Conference.

“The services provided are excellent. Everyone is right here which makes things easy. If we have an issue or we need to do something different, all the tools are here,” said Kathryn Henshue.

Reynolds, who is also the chair of the Bermuda Captives Owners Association, said he would “definitely choose Bermuda again”. “It is the most robust, mature domicile there is, filled with bright people who understand what we do. It is a wonderful domicile.”

And Erickson said he was approached by someone about forming a captive and provided information to them about Bermuda, recommending that they should visit.

“When they got back, they said they were blown away by the professionalism and service here.”

Asked if there was anything globally or in the US possibly impacting them, the answers ranged from a Roundup lawsuit to tariffs.

Reynolds said: “Our members are hardware store owners. An example is the recent lawsuit against Monsanto for Roundup. All the hardware stores carry  Roundup. What should they do? It is a big question.”

He said some legislation, such as in California, meant people selling products such as Roundup had to be aware of the chemicals and products used. “There are up to 800,” he said.

Henshue, who works with construction and design professionals, added: “One of the things we hear is about a professional talent shortage. The Baby Boomers are retiring and there is a talent gap between them and the Millennials.”

She added that data protection was also an issue, with the compliance and regulatory costs of doing business coming on top of existing overheads.

Erickson identified the issue of recruiting and maintaining top talent – especially in nursing and agreed that data protection was also a high priority for his business.

According to Reynolds, ransomware is an issue. “To  a hardware store, exposure to ransomware is the biggest exposure. It is creating a growing need among our members.”

Blair said tariffs with China and the possibility of tariffs with Mexico as well as Brexit, where they had to set up temporary warehouse space, were also possible impacts.

Asked how they dealt with the cyber threat, Reynolds said that ten years ago he sold no cyber policies but it now consisted of five percent of members. “It is increasing really fast.”

Erickson said: “A cyber policy is very important to us but we have  not had any discussion about adding it to our captive. In the future it might be something we look at.”

And asked whether their captives were still relevant, Henshue said: “The US economy is strong right now but if the economy starts to fail we see more claims.

“Not knowing what is going to happen in the markets makes me feel that the captive is going to be relevant in the future.”