Monday, February 26, 2024

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France a competitive domicile, Captive Federation to launch this year – Oliver Wild

France has the opportunity to build a whole captive ecosystem now its new regulatory regime is in place with risk management association Amrae planning to launch a Captive Federation in September.

Captive Intelligence reported in June the French government had confirmed details of the equalisation provision made available to reinsurance captives and last week the first two new entities were licensed since publication of the decree.

Captives formed by Limagrain, an international agricultural co-operative group founded by French farmers, and Naval Group, the part state-owned French industrial group that specialises in naval defence design, takes the number of reinsurance captives domiciled in France to 12.

Speaking in an exclusive interview on GCP #89 Oliver Wild, president of Amrae, said they were very pleased with the resulting legislation and framework after more than four years of lobbying.

“The major achievement is through this change we have been able to allow organisations, companies to take their own destiny in their own hands effectively, and take more control of how they manage risk and how they anticipate and prepare for negative events,” Wild said.

“The outcome is in line with what you can find elsewhere, so it means that France is now a competitive domicile compared to other countries. We have a true opportunity in that market. I expect that whole ecosystem to develop strongly in France.”

Captive Intelligence understands there is a strong pipeline of further captive formations that could be completed this year, although there will be pressure on the French regulator to prevent a bottleneck of applications building up.

When Amrae surveyed its members in 2022 it showed around 50 organisations were interested in forming a captive, with 28 of those waiting to see the details of the French captive regime before proceeding or making a domicile choice.

The Association is planning to launch a Captive Federation in September that would serve as a community for captive owners, both in France and overseas, as well as a resource for companies that are considering or in the process of establishing one.

“The Federation will also have a strong role to play there on bringing those people together and sharing practices and answering questions,” Wild added.

“A captive is not a tool that you build overnight. There’s education to be done internally as well with your CFO, with your director of operations and so on, to really understand how you can make the most out of your captive and your insurance and risk management strategy.

“That’s why we firmly believe the Federation will have a lot of work on its hands bringing that community together and making sure that everyone, if they have any doubts or fears, that we can respond to that and share the practices that we have.”

Listen to the full exclusive interview with Oliver Wild, President of Amrae, on the Global Captive Podcast here, or on any podcast app.