Captive SIG tackles ESG, structured reinsurance and domicile options

The Airmic Captive Special Interest Group (SIG) has been one of the Association’s busiest SIGs in 2021, with the self-insurance vehicles becoming increasingly valuable as the challenging insurance market conditions continue. 

The group has met four times during the year, with topics including structured reinsurance programmes; capital optimisation; environmental, society and corporate governance (ESG) issues; and the UK’s plans to become a captive domicile. It has welcomed several new members who have formed captives in the past 18 months or who are in the process of doing so, as organisations reassess their risk financing strategies.

“Our captive meetings have been extremely vibrant in 2021 and members find real benefit from exchanging ideas and experiences with fellow captive owners,” Richard Cutcher, Airmic’s captive ambassador, told Airmic News.

“Airmic’s membership includes some of the most advanced and sophisticated captives in the world, but we are also welcoming new captives to the group. I expect this to continue in 2022 as further formations come to fruition.”

The growth of captive interest and utilisation is not restricted to Airmic members, however. This is a trend taking place all over the world. The State of Vermont, the United States’ largest captive domicile, is on track to license more than 40 new captives in 2021. It had already licensed 38 new captives in 2020.

In Europe, Guernsey and Luxembourg appear to be winning most of the new captive business, while Singapore and Labuan in Asia Pacific are growing at unprecedented speeds this century.

Marsh has more than 1,300 captives under management worldwide and has seen gross written premium continue to increase since the market started hardening, according to its 2021 Captive Landscape Report. In 2018, its captive portfolio wrote $49.5 billion in gross premium. This rose to $54 billion in 2019 and almost $61 billion in 2020.

There is also an increasing movement to explore what role captive insurers could play as organisations grapple with ever greater ESG scrutiny at group level.

At its November meeting, the Captive SIG discussed this topic extensively following the launch by the Guernsey International Insurance Association (GIIA) of its ESG Framework for Insurers in May this year. Ciaran Healy, Director of Client Solutions at Aon Captive & Insurance Managers, also presented Aon’s Green Captive Concept to members. This aims to position the captive as a vehicle to support ESG betterment at group level.

Airmic will be hosting its first one-day Captives Forum at Lloyd’s of London on Wednesday, 23 March 2022.

The Forum will include captive owner speakers from the UK and beyond and provide multiple streams of content suitable for both experienced captive users and members who are relatively new to captive insurance and keen to learn more.

This will be a private, members-only event, with captive specialists from a select group of Airmic’s partners invited to contribute their own thought-leading perspectives.

If you would like further information on the Airmic Captive Forum, the Captive SIG or other captive-related activities organised by Airmic, please email Richard Cutcher.