Captive health checks can unlock new value

Captive owners should periodically review their programmes to ensure they continue to meet changing business and risk management needs, according to Brown & Brown’s managing director of alternative risk consulting, Matt Gravelin (pictured), Captive Review reports from Bermuda.

Speaking at the Bermuda Captive Conference, Gravelin said “health checks” are particularly useful when a captive is between three and seven years old. These reviews assess operational, financial, governance and strategic factors to determine whether a captive remains fit for purpose.

As companies grow through acquisitions, divestitures or expansion into new markets, their risk profiles can change significantly. Revisiting a captive’s original objectives can help ensure it continues to support long-term business goals.

Gravelin highlighted the value of data accumulated by mature captives, noting that improved actuarial modelling can provide a better understanding of volatility, optimise programme structures and strengthen negotiations with insurers and reinsurers.

Reviews can also identify opportunities to expand coverage, deploy captive capital more effectively and reassess governance arrangements, service providers and domicile selection. He also pointed to growing use of dormancy provisions, allowing companies to retain captive licences at lower cost when vehicles are no longer actively used.

For the full report on Captive Review click here. 

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.