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29 February 2024Analysis

Changing times & captive evolution

Franck Baron, president of IFRIMA, lists for Captive International some of his highlights from the past 20 years of evolving risk management and captive development.

"Still relevant today is the need for captive owners to effectively lead and manage their captive operations." Franck Baron

Franck Baron has been working in the world of risk management for the past two decades. Based in Singapore, he is currently group deputy director risk management & insurance of international health and security risk management company International SOS. This includes the position of chief executive, Odeon Re (an International SOS captive domiciled in Singapore) as well chief executive of the company’s in-house broking operations Odeon Insurance Brokers, Singapore, as well as International SOS Services (France).

Baron is a board member of the Pan Asia Risk & Insurance Management Association (PARIMA), which he was founding chairman of, and president of the International Federation of Risk and Insurance Management Associations (IFRIMA).

He was vice-president–global insurance & risk management for fragrance and nutrition specialist firm Firmenich in Geneva, Switzerland, since November 2003 and in Princeton (US) since 2008.

He was deputy director of the risk management division of Groupe Danone, where he was in charge of the company’s enterprise-wide risk management programme and regional risk manager for Africa, Europe and the Middle-East. He also worked for two years as deputy risk manager for US-based food company Mars in Europe, before becoming key international account executive at brokers Aon and then Marsh over a period of six years.

Baron has a Master’s degree in political science, as well as a Master’s in management and in risk management. He is an Associate in Risk Management (ARM) as well as European Fellow in Applied Risk Management. In addition, he is a certified director with the INSEAD International Directors Programme since 2017. He has held a European FERMA RIMAP risk management certification since 2016.

What are the three key factors that have helped change the captive insurance industry?

First is the growing use of captives for employee benefits programmes. Then the hardening commercial insurance markets and the expansion of risk exposures challenging insurance capacities and their insurability (eg, cyber and climate change).

What have been your personal highlights from the last 20 years?

The drive from International SOS owners to develop their captive as a strategic risk financing tool would be first.

Then the ability to set up a captive in the country where the parent company is headquartered, and the changing face of risk management allowing our captive to be leveraged as a true operating business unit.

Becoming the first Asia-based captive with life and non-life licence being also self-managed was important, as was the direct link between our captive underwriting appetite and the parent company risk-mapping.

Also we became the third captive worldwide to be signatory of the UN PSI and the first in Asia. It’s a true testament of how our captive has embraced ESG concerns and its ability to support our parent company’s ESG strategy.

The creation of the Captive Owners Association for Asia in January 2024 was another highlight.

What setbacks has the sector seen in 20 years?

Still relevant today is the need for captive owners to effectively lead and manage their captive operations vis-à-vis captive management services companies.

Next is the need for captive owners to elevate the conversation internally so that captives are seen not just as a technical retention tool but as a true strategic risk financing operation.

The lack of penetration of employee benefit programmes into captives has also been a problem.