Friday, July 4, 2025

Membership options

Home Blog Page 107

Marsh reshuffles leadership in UK, Ireland and Asia Pacific

0

Marsh Captive Solutions has announced a reshuffle of its leadership in Dublin, Asia Pacific and London as Stephen Hawkes and Brian McDonagh retire.

From 1 February, 2023 Lorraine Stack, international consulting and sales leader at Marsh Captive Solutions, will add leadership of Marsh’s Dublin operations to her current role.

She succeeds McDonagh, who is retiring after 27 years with Marsh, and be responsible for a team managing single parent captives and special purpose vehicles domiciled in Ireland.

Stack will continue to report into Ellen Charnley, president of Marsh Captive Solutions.

Stuart Herbert has led a fast growing captive operation in Singapore since 2011 but will now be relocating to the UK to take on the position of international captive consulting practice leader. He featured in GCP #47 discussing growth in the Asia Pacific captive market.

He succeeds Stephen Hawkes, who is retiring after 29 years with Marsh, and will lead a team responsible for captive feasibility studies and strategic reviews for prospective and current captive owners.

Herbert’s successor for Asia Pacific will be Nisala Weerasooriya, overseeing offices in Singapore, Labuan and Australia.

Weerasooriya is currently head of Marsh Captive Solutions’ New York office and has held various client services roles over the past 30 years.

“Throughout their careers, Lorraine, Stuart, and Nisala have demonstrated exemplary leadership and unwavering dedication in supporting our captive insurance clients,” said Charnley.

“In this time of unprecedented captive growth, their considerable experience will be invaluable as we seek to provide enhanced services and resources to our clients.”

Herbert will report into Lorraine Stack, while Weerasooriya will report to William Thomas-Ferrand, leader of Marsh Captive Solutions, International.

Ellen Charnley, Lorraine Stack and Stuart Herbert have all featured in numerous episodes of the Global Captive Podcast, alongside colleagues and clients. Listen to all episodes featuring Marsh on their Friend of the Podcast page.

Phillips 66 captives retain A rating, has DoL approval to reinsure US EB

0

Two captives owned by energy giant Phillips 66 have had their financial strength ratings of ‘A’ (Excellent) and long-term issuer credit ratings (long-term ICR) of “a” (Excellent) affirmed by AM Best.

Radius Insurance Company is domiciled in the Cayman Islands, while Spirit Insurance Company is domiciled in Vermont.

Phillips 66 also owns SCH Insurance Company, a Texas-domiciled captive established in 2014, which is not rated.

Earlier this year Spirit received approval from the Department of Labor (DoL) to begin reinsuring the Phillips 66 group life insurance plan, which is being fronted by Zurich American Life Insurance Company.

Spirit provides property damage, business interruption, construction all risks, excess liability and employee medical reimbursement insurance to Phillips 66 and its US operations, while Radius provides similar coverages to the group’s overseas operations.

Spirit also provides terrorism coverage supported by reinsurance protection provided by the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA).

The ratings reflect Spirit’s and Radius’ balance sheet strength, which AM Best assesses as very strong, as well as each company’s adequate operating performance, neutral business profile and appropriate enterprise risk management. The outlook for the ratings is stable.

“Spirit and Radius each have inherent benefits of financial flexibility and support as captive insurers for their ultimate parent, Phillips 66,with integrated operations, closely aligned and uniform interests and establishment as core elements in its overall risk management program,” the ratings report stated. “The captives’ loss experience has remained generally favorable due to the parent’s strong loss control program and to a relatively small number of material catastrophe losses. Phillips 66 conducts periodic reviews of Spirit’s and Radius’ potential loss exposures through an industrial risks specialist.”

New French regime “could triple” captive number in France

Captive professionals in France have welcomed the all but passing of the 2023 Budget (PLF), which includes provisions for introducing a new captive regime in the country.

French risk management association Amrae has been lobbying hard for more than two years for legislation that would make it easier for captives to be established in France.

Prime Minister Elisabeth Borne announced on Thursday she would push the finance bill through without a vote, clearing the path for progress.

The existing French regulatory regime is not hostile to captives and since 2020 five new reinsurance captives have been formed in the domicile by French corporates.

Multinational payment and transactional services company Worldline established a captive in 2020, while food processing business Bonduelle and consortium Groupe SEB set up captives last year.

In October 2022 multinational advertising and public relations company Publicis Groupe got its captive licence, and Captive Intelligence understands another captive was licensed on Wednesday evening.

One of the key negotiating points to get a specific captive regime introduced in France was keeping hold of the equalisation provision already available to reinsurers in the country.

“France is a very interesting domicile for captives,” Laurent Bonnet, head of captive and alternative risk transfer solutions at Marsh France, told Captive Intelligence.

“The regulator is very approachable and supportive to develop captives in France. However, in an international competition, Luxembourg is far beyond France in that respect.

“The equalization reserve is definitely a key differentiator and there will be new captives for sure, but less than we could expect.”

Bonnet added that the success of the legislation would depend on an application decree which will establish the rules under which captives are formed and governed.

“We know the framework now, but we don’t know yet all the details. The devil is in the details.

“But if we benefit from a coherent legislation compared to the one in place in Luxembourg, then we should triple the number of captives in France in the coming years. And some captives based outside could be repatriated.”

French-owned captives have typically gravitated towards Luxembourg and Ireland, while there are also French captives in Malta, Switzerland and Guernsey.

It remains to be seen whether captives that are established in a domicile with a strong track record on captives will be tempted to re-domesticate now that the option in available.

TMF Group works with large European insurers, including several direct writing captives, on their insurance premium tax administration and compliance.

France-based Christophe Bourdaire, IPT quote content director at TMF, said they had been following the developments closely.

“With a focus on reinsurance captives, and a primary interest in domestic companies, it will be intriguing to see what interest is generated from local companies with many CAC 40 companies already having captives established in other European domiciles, such as Luxembourg,” Bourdaire said.

“We will wait to see if in the future provisions extend to the set up of direct write captives.”

“International discussion” requested for captive board criteria

0

The requirements of captive boards and independent directors varies from domicile to domicile but a global standard may be useful to enhance governance of captive insurance.

Speaking on a recent GCP Short, Paul Wöhrmann, head of captives services at Zurich, was joined by Andrew Bradley, Malcolm Cutts-Watson and Francoise Carli, who have all had careers packed full with captive experience, and sit on captive boards today.

Xavier Groffils, manager of the Luxembourg captive owned by Belgian chemicals company Solvay, and Hans-Peter Wagenhöfer, director of insurance and reinsurance at German multinational BASF, also shared their views.

The speakers, who addressed the topic at the European Captive Forum, in Luxembourg, in November, recognised the varied approach to outside directors across captive domiciles, referencing Airmic’s Captive Governance Guide published in May 2019.

“Since the complexity of the captive business has increased significantly, I’m of the opinion that an international discussion of the risk management community regarding the definition of unified qualification criteria for captive board members could prove to be worthwhile for Europe,” Wöhrmann said.

In Switzerland, the regulations state that one third of an insurance company board members must be independent, but the regulator is able to grant exceptions for captives.

There is also a minimum requirement of three board members for a captive in Luxembourg, but no obligation to have outside or independent directors.

Of the major captive domiciles in Europe, only Guernsey, the Isle of Man and Malta require an independent non-executive director, while Bermuda, Cayman and Vermont, the three largest captive domiciles in the world, do not require them.

Whether directors need to be resident in the relevant domicile also varies by jurisdiction.

Cutts-Watson, previously chairman of the Willis global captive practice and now an independent consultant, suggested that by going through and translating the various domiciles’ regulations, guidance notes and codes of conduct concerning captive boards into the Institute of Directors’ definition of a board, a comprehensive list of requirements emerge.

“You’ve got technical requirements such as risk management, insurance, accounting, legal, you’ve got the need for strategic thinking,” he said.

“You’ve got the need to demonstrate corporate governance and compliance, and you’ve got the need to show judgment, an ability to build trust and to understand the parent company business.”

He believes outside or independent directors are well suited, or even required, to deliver those range of perspectives and judgement.

“You’re effectively looking for someone or something to provide independent oversight and constructive challenge to the executive directors,” he added.

“And by implication, I think that that’s saying you do need an outside director on the captive board.”

When asked what makes a good outside board member of a captive, Francoise Carli, formerly vice president of insurance at Sanofi, said it is critical that they behave as a non-executive.

“You are not there to give orders, to do things, to realise different parts of the activity,” she said.

“You are there as a non-executive, which means you do not execute. And this is very important because if you don’t have that kind of position, you’re going to make more tension in the board than anything else.”

Carli added that it is a “plus, not a must” that an outside board member has a specialist background in risk, insurance, actuarial or even in the industry sector of the captive parent.

“Because if you have the right position in the board, you’re going to bring what is important, which is a contribution to the discussion and of course a good assessment of the situation,” she explained.

Andrew Bradley, formerly head of group risk services at Nestle and now an outside board member of a captive, said he does not believe the true value of outside board members is currently being realised.

“Outside captive board members aren’t necessarily taken up and included in a board unless it’s required by the local captive domicile,” he said.

“I found a few cases where forward thinking companies have expressly gone out to have not only one, but sometimes two outside board members to challenge what they do and have that extra experience in managing the company.

“So I think this is still very much work in progress and an important part of captive governance, but I think people somehow need to see the value of outside board members because I’m not sure whether that’s coming through just at the moment.”

The panel also debated the need for greater diversity on captive boards, not just with regard to gender, age and ethnicity, but also from different industries and backgrounds.

“This is exactly what is happening in the largest companies around the world,” Carli added.

“Why shouldn’t we have that in the captive business? It is critical that people understand that these broad sets of experiences is giving another way to assess what’s happening in the board and to support and help the executives that are part of the board team.”

Finally, in terms of board member recruitment, Cutts-Watson recognised there is starting to be a move away from the “old boys network” perception, with regards captive board appointments, that is based on a historical reality.

“It’s hard to avoid the accusations of male, pale and stale,” he said.

“What I’m seeing now is a move to a more professional way of recruiting outside directors and I would say it’s a transparent and objective process that is defensible so that if you are challenged you can demonstrate why you have appointed a particular candidate.”

Captives to play key role in energy transition


  • Reducing capacity for ‘dirty industries’, but challenges remain to insure renewables
  • Captives being deployed to incubate new risks and collect data
  • New captive projects established to support decommissioning efforts

ESG and the transition to a greener planet is becoming an increasingly prevalent topic for both businesses and communities around the world, and captives are beginning to understand the important role they can play.

While the commercial market is signalling it is reducing capacity for, or total exit from, some so called ‘dirty industries’, there is also a race to find insurance for large green energy and renewable projects. Captives are being leaned on for capacity in both areas.

Subscribe to Ci Premium to continue reading
Captive Intelligence provides high-value information, industry analysis, exclusive interviews and business intelligence tools to professionals in the captive insurance market.

Concert Group appoints John Hendrickson CEO

0

Concert Group has appointed John Hendrickson as CEO, effective from 1 January, 2023, succeeding Jonathan Reiss at the specialist captive fronting business.

Reiss, who assumed the role of CEO at Concert’s inception in 2021, will continue on the board of Concert.

Concert has been backed by founders Brady Young, CEO of Strategic Risk Solutions, Wes Duesenberg, Jr., CEO of Southern Insurance Underwriters, and Christopher Collins, CEO/founder of Corinthian Re, in partnership with Century Equity Partners and WT Holdings, Inc.

Hendrickson has nearly 40 years’ experience, including executive roles at StarStone Group, Validus Group, and Swiss Re.

“We’re delighted to welcome John to Concert,” Brady Young, Chairman of Concert said.

“Throughout his career, John has distinguished himself in delivering quality solutions and support to his client relations.

“His deep knowledge and experience in financial markets and the insurance industry represents precisely the right skill set as we enter our second full year of operation.”

Young said Reiss will continue to provide Concert with his guidance and expertise as a member of the board and aid the transition to Hendrickson.

“I’m genuinely impressed with Concert’s leadership team,” Hendrickson said.

“The company has positioned itself as a specialty fronting carrier focused on serving the captive and programme business market segments. I am excited to capitalize on what I consider a unique market opportunity.”

In GCP #66, Reiss discussed the genesis of Concert, shared his views on the wider fronting market for captives and explained the company’s relationship with Strategic Risk Solutions.

Hendrickson has also served as an advisor to numerous clients in the (re)insurance sector, including as a founding member of Smith Barney’s insurance investment banking practice from 1985 to 1995.

GCP Short: The value of outside board directors

0
Paul Wöhrmann, Zurich
Francoise Carli
Malcolm Cutts-Watson , CWC
Andrew Bradley

This GCP Short, produced in partnership with Zurich Insurance, is all about the value and selection of outside directors for captive insurance company boards.

Friend of the Podcast Paul Wöhrmann, Head of Captives Services at Zurich, has brought together five expert speakers on this topic, three of which are already independent directors of captive boards.

Over the course of 25 minutes listeners will hear from Andrew Bradley, Malcolm Cutts-Watson and Francoise Carli, who have all had careers packed full with captive experience, and sit on captive boards today.

We are also joined by Xavier Groffils, the manager of the Luxembourg captive owned by Belgian chemicals company Solvay, and Hans-Peter Wagenhöfer, director of insurance and reinsurance at German multinational BASF.

Our expert panel discuss definition of outside and independent directors, how they are viewed in different jurisdictions around Europe and the value they bring to a captive board. Malcolm begins by outlining what he believes are the key responsibilities of a captive board and outside directors.

For more information on Zurich and its captive services, visit its Friend of the Podcast page here.

More captives to sign up to the UN’s PSI – Ciaran Healy

0

Aon’s Ciaran Healy is confident more captives will sign up to the United Nations’ Principles for Sustainable Insurance (PSI) with Enel Insurance a “proof of concept” that others should be able to follow.

Captive Intelligence revealed last week that the Netherlands-domiciled captive owned by Italian multinational energy company Enel had been the first signatory to the PSI.

In GCP #76, recorded at the European Captive Forum in Luxembourg, head of insurance Antonio Nervini explained how the captive had used four pillars to deliver value to the group’s sustainability initiatives.

He also made a rallying cry: “It’s time for captives to join the PSI. It’s time to take action.”

Healy and Butch Bacani, programme leader for the UN’s Principles for Sustainable Insurance, also provided further context on the PSI and why they felt it was an important development for captives to recognise and sign up to them.

“The starting point in helping clients understand the sustainability agenda and how it relates to a captive, I always refer to the PSI,” Healy said.

“It occurred to me that a captive actually has a very unique place in this dynamic. It’s sort of the nexus between the real economy or the corporate and I guess what the UN is trying to achieve.

“Making the captive part of that ecosystem and aligning with the structures that Butch has put in place made complete sense.

“And so, understanding the work that Enel had done anyway, they were quite progressive in their captive and how they think about sustainability – Enel as a group is obviously leading from an energy perspective in terms of sustainability – it made sense just to join the two together.”

There are now 220 insurance organisations signed up to the PSI, with the insurers representing one third of global premium and $15 trillion of assets under management.

Aon was the first broker to join the PSI in 2018, which has ultimately led to the work with Enel Insurance on them becoming a signatory.

“Enel Insurance is a very good start on how the engagement with the captive insurance industry could actually be driving positive outcomes for sustainable development,” Bacani said.

“So we believe this is just simply a work in progress as part of the maturity of the PSI, and we’re happy that we are at this stage right now.”

Healy echoes Bacani’s ambition and Captive Intelligence understands a handful of other captives are at an advanced stage in preparing to sign up to the UN’s Principles for Sustainable Insurance.

Healy is “more than hopeful” that there will be further captive signatories to the PSI in the coming months.

“What this is going to do and the work that Enel has done is a proof of concept that a captive actually has a role to play and can do something very positive around sustainability,” he added.

“There is a little bit of a myth of ‘well, the captive is small, I can’t do much around it’.

“But when you think about the protection gap, captives can potentially access reinsurance. So we can make that connection between the corporate ESG agenda, and actual issues on the ground. That’s a really important point.

“I would be absolutely certain, especially after listening to this, that we will get a lot more enquiries and a lot more captives signing up to the PSI.”

To read the Report authored by Aon and the United Nations on Using a Captive Insurance Company to Drive Positive ESG Outcomes, click here.

Oxford’s new Montana LLC assigned FSR, new litigation coverage offered

0

AM Best has assigned a financial strength rating (FSR) of ‘A’ (Excellent) and a long-term Issuer credit rating (Long-Term ICR) of “a” (Excellent) to Oxford Insurance Company MT LLC (Oxford MT), domiciled in Montana.

Oxford Risk Management Group is a United States captive management firm which specialises in captive and cell solutions for small and medium sized enterprises.

In 2018, the firm was bought by Risk Strategies, which has bought several captive management outfits in recent years.

Its first cell company, Oxford Insurance Company LLC, was formed in Delaware in 2010 as a special purpose captive company.

In 2022, Oxford added Oxford MT to its existing cell platforms to write exactly the same business, while diversifying its exposure across domiciles.

AM Best has also affirmed the FSR of ‘A’ (Excellent) and the Long-Term ICR of “a” (Excellent) of Oxford Insurance Company LLC (Wilmington, DE) and its affiliates: Oxford Insurance Company NC LLC (Wilmington, DE), Oxford Insurance Company TN LLC (Nashville, TN), and First Community Bankers Insurance Company, LLC (Nashville, TN).

AM Best said the ratings reflect Oxford’s balance sheet strength, assessed as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The ratings agency said Oxford’s ERM practices are appropriate with strong operating controls and procedures in place to continually establish new cell structures and manage a platform with surveillance and monitoring to protect the integrity of the pool for policyholders.

The active cells also remain very strongly capitalised individually and collectively with strong operations.

Oxford has also begun offering a new litigation defence coverage to its clients, which the rating agency said it would monitor the governance of.

AM Best described Oxford’s solution as operating as a pooling arrangement that enables all active cells on its platforms to retain 20% of their own written premium with any claims submitted to the unified pool, while the remaining 80% of written premium is shared pro rata across a large base of insureds of similar size, avoiding concentrations and dependence on any single cell.

The ratings agency noted that loss ratios across the various cells are very low, effectively covering a hard-to-write and unique coverage for low frequency, high severity risks.

Cayman Islands Monetary Authority imposes regulatory fines on Artex

The Cayman Islands Monetary Authority (CIMA) has imposed discretionary administrative fines totalling CI$95,409.11 on Artex Risk Solutions (Cayman).

The breaches relate to the below conduct that occurred between 2020 and 2021:

Subscribe to Ci Premium to continue reading
Captive Intelligence provides high-value information, industry analysis, exclusive interviews and business intelligence tools to professionals in the captive insurance market.