Exolum’s Luxembourg-domiciled captive was primarily established to address a future lack of capacity in the commercial market, Mario Ramirez, risk & assets manager at Exolum, told Captive Intelligence.
The Spanish multinational Exolum stores and transports chemical products and hydrocarbons.
Exolum’s captive, Cibeles Re, was formed at the start of 2024 and is managed by Marsh.
Speaking on the Global Captive Podcast, Ramirez highlighted that in the next five to 10 years, he anticipates a potential shortage of capacity in the market.
“This is where the captive will become crucial,” he said. “If you read the press or any notices from the insurance market, they’re starting to mention when they will begin imposing restrictions on the oil and gas sector.”
Ramirez said that a few years ago, the company noticed an acceleration in the green energy transition, which coincided with a drop in demand for the traditional Exolum products.
“We started to see that there could be a lack of capacity in the future to insure certain businesses that we are working on, and also a lack of capacity for the new technologies that we need to put in place to bring new energies to the market,” he said.
Ramirez said the view of Exolum is that the company should transition in parallel with the change in demand.
“While we need to support new technologies, we also need to continue supporting the old ones,” he said.
“What we have found in the captive market – and I am sure you all understand this – is that we’re able to share more risk with insurers and retain a greater portion of the risk ourselves.”
Cibeles Re started writing property damage after its formation in January, and later expanded to include cyber, terrorism and natural catastrophe risk after its July renewals.
“We aim to include liabilities in the next renewal, likely with a very low retention,” Ramirez added.
Ramirez said it is important for those within the company to understand how a captive works.
“It is very difficult to work with some lines that are in the captive and some lines that are not, especially the big ones such as liability and property,” he said.
“That’s why we have decided to include liabilities next year, probably with a very low retention.
“It will be more efficient in terms of being able to explain budgeting and what is happening with the insurance programme, when the whole programme follows the same system.”