Saturday, June 15, 2024

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Captive conversation has “flipped 180 degrees” – Barnett Waddingham’s Heah

The conversation around captive utilisation has completely “flipped” over the past few years due to increased pricing and reduced capacity in the commercial market, according to Wan Heah, partner and head of general insurance at, Barnett Waddingham (BW), an independent UK professional services consultancy.

“I think a few years ago, if you asked me what’s in the captive space, a lot of them were talking about the viability of a captive,” he said.

“So, even up to four years ago, the group could go out and get external insurance cheaper than the captive would be able to charge because the market was hungry, and they had capacity to use up.”

Heah said the conversation had now completely changed, with clients struggling to get external insurance, and as a result, the captive owner no longer worries about viability.

“In fact, what they do care about is if they are getting the right price. So that conversation has done a complete 180.”

Heah noted that he had been party to conversations in which organisations that have never had a captive before are now thinking about launching one because they cannot get the cover they need.

“What they want is probably in the reinsurance market somewhere, but they can’t get that because there isn’t a direct primary insurer that would be willing to take the risk on,” he added.

Heah said Barnett Waddingham acts as the outsourced actuarial function for captives domiciled in Europe, including in Ireland and Malta.

“In addition to being the outsourced actuarial function, sometimes we also act as the head of actuarial function,” he said.

“We effectively act as the chief actuary, and will take on the statutory and regulatory obligations that come with that.”

He said the company also helps captives with pricing and performance reviews whilst being cognisant on expense controls.

“From our perspective it is making sure that you can still deliver a cost-effective actuarial service without removing value from the delivery,” he said.

Heah highlighted that BW provides actuarial expertise for both small and large captives, even in instances when a larger captive might also have its own in-house actuarial function.