11 September 2022ArticleAnalysis

Captive solutions in challenging times

After attending the Vermont Captive Insurance Association conference in August, I feel the captive insurance market is stronger than it’s ever been. The COVID-19 pandemic has had an impact and insurance markets have hardened significantly over the last few years, which has very much influenced the views of captive owners and service providers.Innovators in the industry continue to use captives to develop new solutions to provide coverage, where it’s become too expensive or is no longer available, as well as lowering an organisation’s total cost of risk.We’ve been very busy over the last few years talking with prospective captive owners, doing feasibility studies, forming new companies as well as of course working with current captive owners on how to maximise the use of their companies.We’ve worked on a number of different solutions for the last couple years to deploy their companies where primary and excess insurers no longer are willing to take on certain risks, or filling gaps in coverage, say in a property tower or cyber tower. Or in many cases just to grow existing captives through increased retention stripped by market conditions. So, captives have never been more relevant—they’re more commonly being seen as an essential part of an organisations risk management/risk financing strategy.Captives and alternative risk have always been an integral part of Brown & Brown Risk Solutions. Our company is one which encourages and embraces innovation, is conducive to delivering exceptional client service, as well as developing exceptional insurance professionals. That’s one of the reasons why our teammates tend to stay around for a long time.As captive practice leader, I look forward to continuing these traditions while strategically enhancing our service offerings over the long term. Through the rest of the year—2023 will be here before you know it—I’d like to get to know more clients who I do not yet have a personal relationship with, as well as speak individually with each of the 40-plus professionals we have within our captive practice to extend my thanks and support as well as just ensure our goals as a practice and as an organisation are aligned.I’ve been working with captives for over 20 years now and I have a deep connection to the industry. I’m passionate about developing services that go above and beyond our customer’s expectations as well as proving our clients with innovative solutions for their business. I’m also deeply committed to our people, both our teammates and our clients.

“Innovators in the industry continue to use captives to develop new solutions.”

Matt Takamine, Brown & Brown

Team players
Brown & Brown actively manages captives in over 20 jurisdictions across North America including Bermuda. Congratulations to Bermuda on its 60th anniversary as a captive insurance domicile. It’s a terrific jurisdiction, one in which we continue to be very active in—in fact we have just licensed a new Bermuda captive and have another one we expect to form shortly.That being said, we are domicile-agnostic when recommending jurisdictions to our clients. We always want to find the best home for their clients and their captives, given their specific needs. When performing domicile analyses, we consider a number of different factors and develop a scorecard check to objectively measure the best jurisdiction given the proposed captive and its business plan.As for regulators, we’re always looking for sound, consistent, commonsense regulation. It’s common knowledge that there’s been a flight to quality in recent years. When recommending domiciles, Bermuda, Vermont, Hawaii, Arizona and DC, among others, are always part of the conversation.There are and always will be challenges facing the captive insurance industry. The insurance industry is facing foundational changes that are being brought on by new and developing technologies. Organisations will continually be charged with developing innovative risk financing strategies, including the use of captives.With nearly 6,000 captives worldwide, there may be a time when captives are no longer considered to be the alternative market.