The alternative risk market has always been creative and responsive to “uninsurable” events, but the COVID-19 pandemic is revealing risk in unexpected places, and challenging old notions about what does or does not constitute insurance. Captives have a real opportunity to step up and help businesses navigate the changing risk landscape, says Gary Osborne of Risk Partners.
Gig workers are playing an increasingly important role in the global economy, a phenomenon that is likely to be accelerated by the COVID-19 pandemic. Captives must adapt to the trend by offering flexibility at work, says Greg Lang of RAIN.
An increasing number of captives have been looking at writing business interruption coverage for their owners. They should tread carefully, as doing so without following the correct procedures could have adverse tax implications, says Davis Smith of Bradley.
What qualifies as insurance? Risk transfer and risk distribution are usually cited as key factors, but what if a policy passes this two-part test, before failing the ‘rule of indemnity’ test, asks Greg Lang of the Reinsurance and Insurance Network.
Identifying low probability, high severity risks can be a challenge, as evidenced by the large number of companies caught without coverage when the COVID-19 pandemic struck. The Delphi method is one way that companies can prepare for the unexpected, says Gordon Thompson of AmeRisk Consulting.
Risk managers entered 2020 with certain expectations about the challenges and opportunities the year would present. The onset of the COVID-19 pandemic has forced them to throw their plans out of the window, and rethink how to manage their exposures in a world that suddenly looks very different, says Milliman’s Mike Meehan.
As the global economy and infrastructure continue to weather what feels like more and more storms, many companies find themselves in the middle of cost containment and restructuring strategies. Taking on more risk during these disruptive times may seem counterintuitive, but organisations with existing captives or plans to launch them are doing just that, says Adam Miholic of Hylant.
Connecticut is a relative newcomer to the increasingly competitive world of captive insurance regulation, but has quickly earned a reputation as an attractive domicile. As pressure increases on offshore captives to bring business back onshore, the state hopes to capture a lot of new business. Captive International reports.
The captive industry has been cowed by the IRS for years, with the tax collector securing a string of legal victories that left businesses wondering whether having a captive was worth the effort. However, the COVID-19 pandemic has shattered the logic on which those cases were won, and will lead to a resurgence among 831(b)s, predicts Matthew Queen.
The concept and understanding of captive insurance in Latin America and the Caribbean has been evolving over the past few years, and the adoption of captives among organisations in the region has progressed considerably, say Marsh’s Maria Escobar and Alejandro Santos.