Latin American interest in captives grows
Interest in forming captive insurers in Latin America is surging, especially among mid-sized and large corporations, according to a captive insurance expert with AIG.
Alan Rodrigues, Regional Multinational Client Executive & Global Fronting Underwriter for Latin America & Caribbean for AIG, said in a LinkedIn post that corporations are looking for more sophisticated risk management strategies.
"Whether it’s deductible buy-downs, providing self-insured retention on lower layers to better leverage traditional insurance placements, or accessing the facultative reinsurance market through their captive, companies are starting to take control of their risks in ways previously unseen in the region," he said.
"More and more Latin American companies are looking into financial lines, extended warranty, and even parametric coverages as part of their captive strategies, expanding beyond the traditional property and casualty (P&C) lines that have dominated the market.
"This innovative approach to risk diversification is allowing companies to maximize the benefits of captives in ways that are unique to our region."
Rodrigues said the region's insurance intermediaries are investing in their own captive consultancy capabilities, creating more scope for in-country studies.
But he added there was a pressing need for more localised training of captive insurance professionals.
Countries are also developing their own captive insurance regulatory regimes, he said.
"While Latin America may have been slower to adopt captive insurance than other regions, we are now fully awake to its potential," he said. "This new wave of interest is just the beginning, and I expect to see continued growth and innovation in the coming years.
"The risk landscape is changing, and captives are proving to be an essential tool for companies looking to stay ahead."
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