Challenges allow the captive market to shine: Towle

“Challenging” is the first word that comes to mind when describing today’s market, according to Dan Towle, president of the Captive Insurance Companies Association (CICA), speaking ahead of the annual CICA conference taking place March 5-7 in California.

Towle told Captive International that insurers and risk managers are dealing with rising premiums in the commercial market, ongoing business disruption from supply chain problems and increasing cyberattacks – plus more challenges.

“It is more important than ever for risk managers to be able to proactively support their organisations’ changing risk financing needs – versus simply being reactive,” he said. “We all have to stay on top of our game to deal with the rapid pace of change.”

According to Towle, a hard market arrived before the pandemic – and he believes it will last well beyond 2023. Add to that a slow recovery from the pandemic, volatile financial markets, and the war in Ukraine, and the ingredients that drive captive formation and expansion are all present. The combined effect provides the ideal opportunity for captive insurance to shine.

As a result, Towle said, captives have solidified themselves as a valuable risk management strategy with the ability to provide flexible, long-term solutions. They now sit at the forefront of more risk management strategies than ever.

“The demand for new captives and greater utilisation of existing captives has continued to be strong,” he stated. “All risk managers are looking for the benefits that captive insurance solutions provide. As a result, service providers and domiciles are seeing more inquiries regarding captive formations. They’re also seeing more mid-size companies and more industries considering captive insurance.”

One of the panel sessions at the CICA Conference will see new captive owners and a soon-to-be captive owner talking about why they formed a captive, how they secured internal support, how they selected their domicile and more. Towle pointed out that some of the speakers are from industries and organisations of a size some might not think of when they think of captive insurance.

Towle also underlined the importance of education, and he stressed that events like CICA can lead to an exchange of ideas and innovation that benefits everyone in the industry.

“The captive insurance industry is growing and evolving and CICA is continuing our efforts to engage and develop the young talent that will be developing the captive insurance solutions for tomorrow’s emerging issues,” he concluded.