Samphire Risk, a London-based managing general agent, is targeting captives interested in writing political violence type cover, so it can provide malicious and hostile risk expertise in corporates’ moment of need, according to Charlie Hanbury, CEO of the MGA.
Hanbury was joined by Andy Hulme, director of underwriting at Strategic Risk Solutions, on GCP #87 that also featured a discussion with cyber MGA Intangic.
Traditionally, captives have not written a great deal of political violence but global instability and increased rates has prompted more discussion on captives having a role to play.
Hanbury said: “We feel that ability to give access to crisis response in the moment of need, whether that be driven through political violence, kidnap & ransom, high risk travel, political risk or business integrity, potentially has the ability to act to protect other underlying capital within the captive.”
Samphire is an agency focused on providing cover for malicious and hostile risks, such as terrorism, political violence, kidnap & ransom and other broader crisis response products.
Hanbury said that when it comes to the type of risks that Samphire is involved in, captives are thinking more comprehensively than the traditional aims of risk and reward or in-house premium retention.
Hulme also noted that captive owners are now taking a more holistic approach to risk, with increasing requests for captives to look at lines of business that wouldn’t have traditionally been part of a captive’s makeup.
“Captives are moving away from that kind of risk and reward focus to a more holistic management of risk for the corporate, either in the absence of commercial markets or because the commercial market isn’t providing the flexibility that the corporate requires,” he added.
Instability
Hanbury noted that the current macro environment for malicious and hostile risks in terms of lower capacity and higher rates is providing “ripe ingredients” for making captives start to look like an attractive proposition.
“It starts to bring a little bit more certainty to the organisation,” he said. “The war in Ukraine and the global inflationary environment is driving a lot of instability in developing nations.
“You’ve seen places like Sri Lanka where the social contract between government and population of being able to subsidise essential staples like fuel and food.”
He also highlighted Egypt and Pakistan as places to watch out for.
“That that kind of macro instability will filter through into the marketplace,” he said.
In December last year, Captive Intelligence published an article exploring how global instability, largely caused by Russia’s invasion of Ukraine, could lead to insurance buyers seriously assessing the feasibility of writing political violence risks (PV) through their captives for the first time.
Hulme noted that the current instability in the commercial market is “not an option” for some of the companies needing cover for these types of risks.
“By having their captive in play even for modest retentions allows them to have the discipline within the captive to deploy more capital when needed,” he said.
“It also allows them to fill in that uncertainty when markets or macro events dictate that the commercial market may step away or provide reduced terms or provide uncompetitive terms for the commercial placements.”