Current market conditions make it the “right time” for CBIZ to establish a captive, according to Kristen Peed, director or corporate risk management at the company.

Speaking on GCP #64, Peed said: “I’m not sure if you heard the rumour, but it’s a hard market out there in the insurance world, and it’s not looking like it’s going to get any better, especially when you’re looking at cyber, E&O or D&O.”

She added: “We’ve just decided that at this point, to really to look at our risk more strategically, in a long-term fashion.”

Peed said that during discussions with cyber underwriters at a recent conference, she was told that the cyber market was going to continue to harden into 2022.

“The conflict going on with Ukraine and Russia is not going to help that either because we anticipate more cyber-attacks out there,” she said. “So really, that is going to drive pricing up tremendously.”

As a result, Peed said she needed to start looking at ways in which she can mitigate the risk for CBIZ, “and also mitigate these premium increases”.

“And whether that’s taking larger self-insured retentions or taking a layer somewhere through a captive, those are the things that we’re looking at from a longer-term strategy.”

Peed highlighted that when she first joined the CBIZ, she was excited about the prospect of putting together a captive from the offset, but market conditions made it a harder sell internally.

“The market was soft at that point, you just had a ton of competition out there, and so really timing wasn’t great then,” she said.

“But in this current marketplace where coverage limits are shrinking, you’re seeing a lot more exclusions on policies. It’s hard to find the limits you want, and carriers are increasing self-insured retentions and deductibles.”