ROUNDTABLE: CAPTIVES
Q1: HOW WOULD YOU CHARACTERISE THE HEALTH OF THE CAPTIVES MARKET ON BERMUDA?
“The wider commercial insurance markets have been difficult.”
Paul Bailie
Paul Bailie: Things are pretty busy at the moment. The wider commercial insurance markets have been difficult with rates increasing and we’re seeing increased activity in the captives segment, as a result. In particular, some of our existing clients are doing more than they were, say two years ago, but we are seeing new captives as well.
“We help companies deal with regulations.”
Matt Carr
Matt Carr: I’m a partner in the corporate team within Appleby Bermuda with an insurance and reinsurance specialisation. I cover all forms of commercial insurance and reinsurance, long-term business and, of course, captives. We help companies deal with regulations and help with things such as feasibility studies and planning.
“I don’t think there’s been too much change.”
Michael Parrish
Michael Parrish: I’m head of the client service group for Marsh Bermuda, across captives, commercials, long term sector and ILS. We have been very busy, both with existing clients increasing the use of captives, and with new business.
We’ve added four new captives this year. There’s a lot of interest, but that doesn’t always translate into new captives. But there’s certainly a lot more being done by captives already here. The market is good, it’s busy. Bermuda still doing well. The BMA has been very responsive through the pandemic.
I don’t think the Island has really suffered too much in this segment. Obviously, there’s a bit of economic uncertainty on the Island generally, but that relates more to hospitality, not so much international business, which is very strong. It’s business as usual. I don’t think there’s been too much change.
“We’ve seen a big uptick in interest.”
Brian Quinn
Brian Quinn: Granite Management is a small, independent captive manager, but our real focus is employee benefit consulting.
We’ve seen a big uptick in interest in bringing employee benefits into captives over the past 18 months to the point where we’ve nearly doubled the amount of premium under management for our captive insurance clients.
“The main contrast we’re seeing is a faster speed to market.”
David Gibbons
David Gibbons: I’m a partner at PwC Bermuda, leading our captive insurance practice. The main contrast we’re seeing is a faster speed to market than we have seen previously. Captives, particularly from Canada, are looking to come to market quickly.
We’re also seeing an overall increase in volume of middle-market companies from the US and Canada looking to set up captives.
The level of interest and speed to market is much higher than it has been in the previous three to five years.
“We’ve seen a pretty robust market over the last 18 months.”
Séadna Kirwan
Séadna Kirwan: I’m the risk adviser director with Aon; I lead our client value creation across our portfolio of clients. We’ve seen a pretty robust market over the last 18 months again, focused on existing clients getting more out of their captives.
We’ve also seen a couple of captives come out of run-off positions and restart but on the new formation side, we have a lot of enquiries as well.
The new formations aren’t coming through in huge numbers, but some companies are using cells as a sort of step to a full captive. We have seen a number of those cell formations explicitly set up with the long-term view to transition to a captive.
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