Captives are increasingly being utilised by companies that are experiencing increasing property rates, often because of a substantial loss, or if a company has operations in a high-risk natural catastrophe zone, according to Gary Osborne, vice president of Risk Partners.
Osborne was speaking to Captive Intelligence at the Vermont Captive Insurance Association (VCIA) conference in August, where property was a main area of focus across all areas of the captive industry.
“The property market is stabilising but there is still a lot of subjectivity, depending on if we get through the hurricane season or where someone is located,” Osborne told Captive Intelligence.
“We can still see big increases just because of valuations or if a client has had fires or hailstorm damage then the market’s still not making enough profit.”
Osborne said the general liability market is also starting to “tighten up” slightly on the property side.
“We have seen a lot of people opting for smaller general liability buy-downs, but we’re not really seeing them having to take on much higher retention,” he said.
“Property still accounts for about a third of what we’re focusing on.”
He said that commercial auto is also an area where rates are not improving, and challenges are continuing.
“Covid-19 gave us a bit of a break, but now that traffic is back to pre-pandemic levels, we are facing the same challenges,” he added.
Osborne said the commercial auto market is still experiencing a lot of claims, and with inflation, repair costs have also increased significantly.
“This is also partly affecting electric vehicles,” he said. “While they do not have more claims overall, when they do, the claims tend to be large.” “In some cases, the vehicle is written off entirely because replacing the battery is so expensive.”