Bermuda boosted by captive insurance interest
Captive insurance may be an ageing segment of Bermuda’s flagship international industry but 60 years after the first captive was formed on the island, it is enjoying a new burst of growth and innovation according to Nicola Hallett, director of Artex Risk Solutions’ captive and commercial business in Bermuda.
Speaking to the Royal Gazette Hallett said that much of the fresh enthusiasm for captives, which provide self-insurance for their corporation owners, is down to expensive rates in the commercial insurance market and the difficulty of finding coverage for some emerging risks, such as cyber.
Hallett said the tailwinds for the captive sector had been building for about the past five years. Factors including reduced market capacity, tightening commercial insurance terms, rising catastrophe losses, plus a growing need for pandemic and cyber coverage, were driving a hardening market and causing many insurance buyers to look at their self-insurance options, she said.
This has spurred some growth in captive numbers – last year the Bermuda Monetary Authority recorded 17 new captive formations on the island. However, Hallett added that much of the industry’s expansion was through existing captives increasing the scope and volume of coverage.
“It’s really proving that captive insurance companies are able to thrive in the toughest of times,” Hallett said. “We’ve seen really good continued robust growth, not only in Bermuda, but throughout the captive industry as a whole.
“We’re seeing the traditional property-and-casualty programmes being written, because rates are showing no signs of slowing down in 2022, but we’re also seeing interest in emerging risks that have never been managed through the captive before.”