Businesses have become more likely to go straight into a captive structure when centralising international employee benefits programmes, rather than pursuing global underwriting first, according to Ludovic Bayard, CEO of Generali Employee Benefits.
Bayard was guest co-host of GCP #82, in which he discussed GEB’s own portfolio, where he sees most growth and the opportunities for captive EB programmes to contribute to group ESG and DE&I initiatives.
He also reflected on GEB’s move to Luxembourg to become a regulated reinsurance company in 2018.
Generali Employee Benefits has had a focus on captive business for more than 20 years and Bayard said it’s portfolio today totals approximately €1.6bn in gross written premium across captive, pooling and global underwriting structures.
Of the €1.6bn, 50 captives programmes account for around €700m in annual premium, while €500m is from pooling clients and €400m is from global underwriting and reinsurance only clients.
Bayard said the captive segment is the fastest growing of the three.
“It’s fair to say that we see a bit of decreasing of interest in the global underwriting,” he explained.
“We start to see again an increase of interest in the pooling. It was flat in the last two, three years, but it’s starting again, while on captives it’s really booming. I would say it’s double-digit growth since at least five years.
“On global underwriting, there was a huge interest 10 years ago. Those who started from the very beginning are now ready for the captive. So in the recent two, three years, many of these global underwriting clients have switched to the captive concept.
“The most recent ones are still, let’s say, discovering the world and the difficulties of EB. But we don’t see many new requests on the global underwriting.”
It was previously expected, and often experienced, that clients would go through the full journey of first pooling international employee benefits, before participating in global underwriting for a more centralised buying approach and ultimately ending up with global EB in a captive.
Bayard said, however, that nowadays it is more common for companies to head straight for the captive approach but it still varies from case to case.
“It really depends on the DNA, on the culture of the company,” he added.
“You can have companies who jump to the captive directly, maybe because they already have the P&C mindset and the structure. You have clients who shift from pool to captive.
“There is no average pattern. It’s really about the culture, also the people involved in the programme that make the difference.”
In the full podcast interview, Bayard also discussed some of the challenges businesses must overcome to pursue and implement a captive-backed international employee benefits programme, how GEB is tackling data management and the opportunity for captives to contribute to group ESG and DE&I initiatives.
Listen to the full GCP #82 episode here, or on any podcast app. Just search for ‘Global Captive Podcast’.