There has been a quantum leap in the use of data; this should be harnessed in support of truly well-informed risk financing decisions, according to Willis Towers Watson.
“We are facilitating greatly enhanced decision-making around risk and how it is financed.” Lesley Thompson, Willis Towers Watson
“We continue to evidence our commitment to our culture and values when we say, ‘When you get one of us, you get all of us’.” Bruce Whitmore, Willis Towers Watson
Contrary to our hopes and expectations, 2021 saw the continuation of the COVID-19 pandemic as a defining feature. Global vaccination programmes have certainly allowed for the removal of many restrictions on our daily lives, but we are not yet clear of COVID-19. The Cayman Islands government has announced the move to Phase 4 of its border reopening as of November 20, 2021, with some commercial airlines starting to return. We are looking forward to a gradual increase in visitors and more direct interaction with our clients into 2022.
In the meantime, the hard insurance market has remained a dominant force in our business, albeit we are seeing some easing in the upwards pressure on rates. Throughout 2021, in the midst of the hard market and other change, there has been significant interest in new captives. As a result, our multijurisdictional captive feasibility team generated more studies than ever before, resulting in the formation of more captives than in prior years. The forecast for 2022 is another busy year of formations.
Our US-based captive consulting team forms both offshore and onshore captives, as well as risk retention groups and risk purchasing groups. The team has helped form captives covering all types of traditional risks, as well as more specialised areas such as managed care errors & omissions, directors & officers liability, cyber, gene therapy risk and administrative services only reinsurance.
Our captive consulting capabilities provide superior solutions. These are further enhanced when combined with our multidisciplinary teamwork through which we engage with:
- Brokers who provide insights into the client’s industry and subsectors, especially for nuanced coverage issues that captives need to solve
- Captive management teams who offer hands-on guidance and insights and peer review to ensure we provide industry-leading recommendations
- Actuarial teams who don’t just project losses, but quantify the impact of correlated and uncorrelated risks and the exposure to volatility that directly impacts the success of captives
- Reinsurance placement teams that uncover novel creative solutions when excess carriers are unable to deliver optimal results
- Analytics professionals that develop predictive models of risks on a mono-line or portfolio basis. Our ever-evolving series of ‘core analytics’ tools such as climate, cyber, D&O, employment practices, collateral and captive quantified help captive owners predict the frequency and severity of risks that are difficult to quantify, our Global Peril Diagnostic that assesses exposures to natural catastrophes, and our Connected Risk Intelligence platform that identifies optimal risk financing strategies at the efficient frontier of risk transfer.
By bringing these various elements together and clearly presenting them to our clients, we are facilitating greatly enhanced decision-making around risk and how it is financed. There has been a quantum leap in the collection and use of data in recent years, and we emphatically believe this should be harnessed in support of truly well-informed risk financing decisions.
At Willis Towers Watson we continue to evidence our commitment to our culture and values when we say, “When you get one of us, you get all of us”. Our goal is to bring innovative solutions and world-class advice to our clients by working seamlessly across boundaries of business, geography and functions.
As an integral part of our captive feasibility team, Bruce Whitmore, an industry veteran with over 30 years’ experience is key to bringing these teams together when presenting comprehensive solutions to our clients. He also supports the wider captive community by serving as faculty, board member and chair of the Marketing Committee of the International Center for Captive Insurance Education (ICCIE).
Looking forward as we face increasing risks related to climate change, we expect to see captives being utilised to assist in the risk financing needs related to that. This will be a focus of ours in the coming years and with industry-leading analytical capabilities throughout our organisation, we are well placed to lead in this particular area.
With the virtual 2021 Cayman Captive Forum just around the corner, we hope that readers will visit our booth and join one of the panels our Willis Towers Watson team members are presenting/moderating. Then looking forward into next year, we are excited at the prospect of welcoming our clients once again to the Islands and celebrating all our clients’ successes in person at the 2022 Cayman Captive Forum.
Willis Towers Watson brokerage and reinsurance solutions
The commercial insurance market for property & casualty coverages experienced one of the most difficult pricing and capacity challenges in decades, throughout 2020 and into early 2021. Most lines of coverage witnessed increased rates, reduced capacity, and constricting coverage terms.
As 2021 has progressed so did the deceleration of rate increases and the return of new capacity, alleviating (although not eliminating) the renewal impact on insureds. The velocity and breadth of change in the commercial insurance market over the last 24 months has led many insureds to consider two significant needs: finding alternative means to finance risk, as well as more data-driven decision-making tools.
Willis Towers Watson is well-positioned to assist clients around the world in dealing with alternative risk options by providing risk analysis, consultancy, and placement services. With a consistent and specialised approach to creativity and innovation, captive and reinsurance clients can re-structure their risk and insurance programmes to maximise efficiency and mitigate market hardening. Many businesses are turning to captives to provide coverage where commercial carriers are limiting scope.
The ability to analyse and advise on all lines of business, and all aspects of underwriting, coverage, and associated capital solutions, including statutory and regulatory frameworks within which captives operate, is one way in which Willis Towers Watson is assisting captive clients to assess the amount and type of risk to include in their captives.
In addition, a strong actuarial team assists in the analysis and development of optimal programme structures, which reflects the appetite of today’s captive clients, most of which are seeking expanded captive utilisation. As the ‘analytical broker’ Willis Towers Watson is utilising our actuarial talent to develop models to assist in data-driven decisions around risk and insurance.
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