Heather McClure, general counsel & chief risk officer at Helio Risk
8 August 2023news

Captives can now access untapped SME clients in US

The US captives market is seeing steady growth in many previously untapped areas of the market, with small-to-medium-sized companies increasingly turning to captives as a way of covering their risks.

That’s the view of Heather McClure, general counsel & chief risk officer at Helio Risk, who will be attending this year’s VCIA conference and also moderating a panel on captive structures.

McClure told Captive International that Helio Risk has been talking to many small-to-medium-sized companies who want to form captives – a section of the economy previously barley tapped by the captives market.

“I think there's been this untapped market in the past of small and mid-sized companies, across all industries, healthcare, agriculture, energy. When we think of captives, we talk about the Fortune 100, or the Fortune 500 level companies. But there are also thousands of companies under that level, that can benefit from captives. So, while we do have some very large clients, we are also focused on bringing that captive education and the good news about captives to those smaller and middle markets.”

McClure said that she was used to seeing captives at non-profit healthcare organisations, such as big academic medical centres and so on. But she stressed that there are many other non-profit organisations looking to be good stewards of their money, to serve their communities, and to get the best bang for their buck in their insurance programmes.

As a result, Helio Risk is designing specific products for non-profits and educating them about captives.

McClure said that there is also increased interest in enterprise risk management, with some clients looking to align this with the strategic goals of the board. “We're seeing a lot of interest in in getting an ERM programme either refreshed or redesigned so that it's meeting some of those captive board goals or the parent’s goals in a new way,” she said.

“Everyone is looking at how they can sort of stem the tide of this hardening market and so they're looking at risk mitigation, they're saying it's not enough to just look at it from a financial perspective, and what is the premium going to be. It is about actually controlling the risk. So, they're looking layers down at what other costs are associated with the programme.

“But what we call the core total cost of risk includes what's underneath premium, which includes risk mitigation and lost opportunities to solve or eliminate risks, where it can be eliminated across the organisation. I think organisations are getting more sophisticated about that and their understanding is that they need to actually look at where that risk is and learn how to control it,” she concluded.

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