Defining and modelling adverse scenarios for captive insurance
New and existing captives must provide adverse scenario modelling as part of their feasibility and application process, but most domiciles do not explicitly outline the specific adverse scenarios that should be included. Captives should engage their actuaries early and often, say Enoch Starnes and Michelle Bradley at Sigma.
Life science captives: time for a refresh?
Life science companies originally flocked to captive insurance due to a lack of meaningful product liability insurance capacity. As rates harden and terms and conditions tighten, captives can once again ride to the rescue, say Aon’s Anne Christine Fischer and Simon Huttley.
Captives in the age of COVID-19
COVID-19 is causing severe disruption in the US economy, particularly in the healthcare industry, where treatment centres are struggling to cope. Once the crisis starts to subside, captives could find themselves with a more significant role, says Jason Nordby of M3 Insurance.
Cannabis and captives
Captives can offer flexibility in managing the emerging risks faced by cannabis companies, offering insurance where the market is limited or has excluded certain coverages, says Alexandra Gedge of Marsh Captive Solutions.
Customer service is key for captives
Captives have a natural advantage over commercial insurance companies due to the intimacy of their relationship with their client and owner. But they should never take that relationship for granted, and should prioritise customer service and communication the way a business would with any other customer, says Anders Esbjörnsson of NCC Insurance.
Time to exit your 831(b) captive?
Owners of 831(b) tax-elected captives, and their advisors, have watched with alarm as the 30-year old 831(b) tax election has come under mounting scrutiny. These concerns flared up again with the recent circulation of intimidating letters from the IRS. Owners of 831(b)s have a decision to make about whether they persist with their current arrangements, says Captive Alternative’s Emilie Gastley.
Bermuda: still number one for captives
With the EU adding Bermuda to its “white list” of fully cooperative tax jurisdictions, the outlook looks bright for Bermuda’s captive insurance industry in 2020, says Nick Miles of Kennedys.
Implement pandemic perils into TRIA? No! A free market solution is needed
Should pandemic be included in TRIA? What is needed is innovation, not state aid, says Marcus Schmalbach of Ryskex, who takes a look at the current market situation and invokes the spirit of Adam Smith.
Viruses and volatility
Captives and individual clients alike have been awestruck by the recent moves in the markets. With the COVID-19 coronavirus outbreak quickly becoming a pandemic, just as an oil price war broke out between Saudi Arabia and Russia, markets have experienced a perfect storm. Oppenheimer’s Jack Meskunas attempts to put recent market moves into perspective.
Pandemic insurance? I’d have been laughed out of the conference room! Yet captives could be part of the solution
Most companies were utterly unprepared for the onset of a pandemic as disruptive as COVID-19, with a number of risk managers admitting it was not on their radars. But once they have navigated their companies through the immediate future and business starts to return to normal, they know that will have to change. Captives could be part of the solution. Solomon Teague reports.
