SOFT MARKET CHALLENGE TO CAPTIVE OWNERS
With insurance prices softening, now is a good time for Captive owners and managers to engage in “mature reflection” on whether they are still delivering the right results, a workshop at the AIRMIC annual conference heard today.
The range of activities performed by Captives and the number of different forms they can take have grown significantly in recent years, said David Hertzell, chair of the AIRMIC Captives focus group. At the same time, the market in which they operate has changed significantly. There are both new opportunities provided by emerging centres such as Malta and Gibraltar and challenges from the type of business being written, the tax authorities and legal developments.
“There’s a temptation to do something because it’s what you’ve always done, and Captive owners are as likely to fall into this trap as anyone else. Now would be a good time to have a Spring clean,” he said.
“It’s good practice to review what you. Why do you have a Captive? Are the reasons still valid? Does it achieve its objectives or would there be better ways of meeting them? Is the domicile you chose still the right one?
“I’m not saying that companies should dispose of their Captives altogether, though a few risk managers may come to that conclusion. The issue is to ensure that your arrangements are the best for your company and then to make any necessary adjustments.”
The AIRMIC annual conference, Competitive Advantage Through Risk Management, takes place at the QE2 Centre, Westminster June 5-6. AIRMIC represents risk managers in the UK; its members purchase insurance worth a total of more than £5 billion p.a.
Contact Mark Baylis, Complete Communications, +44(0) 23 8034 9719, markbaylis@aol.com