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.
Georg Balint appointed managing partner at 2RS Switzerland
Zurich-based Georg Balint has been hired by Risk & Reinsurance Solutions (2RS) Switzerland as managing director.
He was previously managing director at Strategic Risk Solutions (SRS), based in Zurich.
2RS Switzerland specialises in offering services to captives and (re)insurance companies in Switzerland and Liechtenstein.
The company also has offices in Luxembourg and Malta.
“At 2RS Switzerland, we pride ourselves on our professional, motivated, and client-centric approach,” said Balint.
“With over 25 years of experience in captive management, we bring unparalleled expertise and dedication to meet the unique needs of our clients.
“We look forward to serving the Swiss market with the highest standards of excellence and innovation.”
PLATFORM launches Captive and Alternative Risk Financing Practice Group
PLATFORM Insurance Management has formed a Captive and Alternative Risk Financing Practice Group.
The Canadian broker was founded in 2014 and provides insurance and bonding solutions to the development and construction community.
Braedy Walker has been appointed as the practice leader for the new captive group, effective immediately.
He was previously vice president, national captive practice leader at HUB International.
Walker brings leadership experience and technical expertise, along with a strong track record in the captive industry.
“The formation of this practice group represents a significant step forward for PLATFORM,” said Walker.
“I am excited to lead this new initiative and look forward to working with our clients to develop tailored solutions that provide greater flexibility and control over their risk management strategies.”
The firm said the move underscores its commitment to expanding PLATFORM’s service offerings and providing innovative solutions to its clients.
“We are excited to welcome Braedy to our team,” said Scott Beitel, president of PLATFORM.
“He has proven himself as an exceptional leader, and combined with his technical expertise will be instrumental in driving the success of our new Captive Insurance and Alternative Risk Financing Group.
“This initiative aligns perfectly with our strategic goals and reinforces our dedication to supporting our current and prospective clients with innovative and comprehensive risk management solutions.”
EIOPA publishes opinion on European captive regulation
The increasingly competitive European domicile landscape has led the EU’s overarching insurance regulator to publish an opinion which aims to further harmonise the supervision of captive (re)insurers across the economic bloc.
Captive Intelligence has reported extensively on captive developments in France over the past 18 months, while the end of 2023 saw Italy licence its first two reinsurance captives.
All countries within the European Union must follow the Solvency II regime meaning, in theory, captive regulation is harmonised across the continent.
The European Parliament voted in favour of Solvency II reforms in April this year that should bring some regulatory relief to captives from 2026, but the European Insurance and Occupational Pensions Authority (EIOPA) has now published an opinion in an effort to “further harmonise, in the context of creating a level playing field within the EU, supervisory expectations”.
EIOPA published its opinion on 2 July, which it said is based on its mandate to “play an active role in building a common Union supervisory culture and consistent supervisory practices, as well as in ensuring uniform procedures and consistent approaches throughout the Union by providing opinions to competent authorities”.
The opinion touches on specific areas of regulation including governance and the outsourcing of key functions, intercompany loans, cash pooling and the application of the Prudent Person Principle.
EIOPA said in the above areas some “divergences of practices have been found”.
While the emergence of Italy, and particularly France, suggests a more competitive domicile landscape in Europe, the reality is both countries are chiefly concerned with being a suitable option for domestic companies to locate their captive.
Although Solvency II is a common regulatory framework to supervise (re)insurers across the EU, countries do have their own unique features, such as the similar but different equalisation provisions in Luxembourg and France.
EIOPA does not cite specific examples, but notes there are differences between territories and these can be accommodated without leading to regulatory arbitrage.
“Some stakeholders expressed uncertainty about how NCAs [National Competent Authorities] can consider national specificities without promoting supervisory or regulatory arbitrage,” EIOPA stated.
“In this context EIOPA clarified that recognising and accommodating national specificities is crucial for public authorities and national competent authorities to tailor regulations effectively. This nuanced approach does not necessarily translate into regulatory arbitrage.”
Sophisticated captives need more value from boards, iNEDs – Stephen Cross
Increasingly complex and sophisticated captive insurance companies should be seeking more value from their boards and independent non-executive directors, according to Stephen Cross, group COO & head of innovation & strategy at broker McGill & Partners.
Speaking in an exclusive and wide ranging interview in episode 106 of the Global Captive Podcast, Cross discussed a range of topics, including his long history working with captives beginning in the 1990s at International Risk Management Group (IRMG) and at Aon following its acquisition by IRMG.
He explained McGill’s growing presence in the captive sector, particularly with regards reinsurance broking for large and complex accounts, and debated the broker-owned versus independent captive manager model.
One area his passion for captives and their continued evolution shone through, however, was when he discussed the role of captive boards and independent directors and how in some instances they are not keeping up with the increasing sophistication of captives.
“The stronger captives have got stronger and a lot of the risk managers have got more sophisticated,” Cross said. “The statistics stand on their own – more domiciles, more captives, more concepts.”
He highlighted that while legislation has changed in the corporate world to improve governance and ensure board members are rotated regularly, that has not happened in the captive market.
“I’ve seen a lot of ex-captive managers sitting on 20, 30 captive boards for a decade or way more,” Cross said.
“You’re not really getting the fresh thinking; you’re not getting the innovation and you get probably a bit confused with the compliance directive and people giving challenge for the sake of challenge.
“I have got feedback from a number of clients – not captive clients of ours, but they’re clients with captives. They’ve described some of the iNEDs and the challenge that’s perceived… it’s interesting, but unimportant.
“I think there’s something in that and we have to listen to our clients and say is the concept of challenge helping or hindering the captive insurance world? And I would say it’s hindering.”
Cross added that if the Lloyd’s and UK captive regimes gain traction, one advantage will be the volume and diversity of experience and talent that is available in London’s square mile.
Just as essentially, however, captives and their owners must be prepared to embrace, value and pay for higher quality and dynamic board directors.
“Equally, by the way, it’s a two-way street,” Cross said. “Captive owners have to be prepared to say we want to invest in this and if you want pay whatever it is, £5,000 or £10,000 to a local director in XYZ domicile, great, but that’s what you’re going to get for it. You’re going to get a bit of the bean counting and a bit of the challenge.
“If you want to really think about growing the captive and thinking about risk as you should think about risk today, because it is very much a board topic, I think you need to bring in people that are a bit more qualified to think in that regard, and there’s a cost associated with that. But to me, everything is a cost versus return.”
He emphasised while some trends in the insurance and the corporate world come and go, captives have been here to stay for a long time and really come into their own during a hard market, as has been evidenced in recent years.
“That is when your board as a captive owner is looking to you to ensure you can get the capacity you need, ensure that the capacity that you’re bringing to the table is rated correctly and obviously priced well,” Cross added.
Listen to the full interview with Stephen Cross on episode 106 of the Global Captive Podcast here, or on any podcast platform. Just search for ‘Global Captive Podcast’ on your podcast app of choice.
Helio appoints former regulator Victor Gallardo
Victor Gallardo, formerly with the Oklahoma Insurance Department, has joined independent captive manager and consultant Helio Risk.
Gallardo had been a captive analyst when working as a regulator and will now be responsible for providing captive management services across Helio’s portfolio.
“Helio has grown considerably in recent months, and our pipeline of new captive formations is robust,” said Heather McClure, managing partner at Helio.
“We are thrilled to add Victor to support our topnotch service to an increasing number of clients.”
Jesse Olsen, Helio’s chief operating officer, said: “Adding Victor with his regulatory experience further bolsters Helio’s client service offering.
“His addition nicely complements our existing staff’s uncommonly broad and deep expertise. This continues to be significant differentiator for Helio, and Victor is an excellent addition to our capabilities.”
Gallardo will be based in Helio’s Oklahoma City headquarters.
“I’m excited to join Helio as I move into this next phase of my professional career,” said Gallardo.
“I’m grateful for my time at the Department, especially learning under Steve Kinion and Andy Schallhorn. Joining Helio is an incredible opportunity. I was drawn by a number of factors, particularly the firm’s life stage and growth trajectory.”
SRS completes Robus acquisition
Strategic Risk Solutions has completed its acquisition of fellow insurance manager, Robus Group, expanding its Guernsey presence and adding a Gibraltar office to its portfolio.
Captive Intelligence reported in January SRS had agreed a deal with Ardonagh Group for Robus.
Peter Child, CEO of SRS Europe, said: “I’m delighted to finally welcome the Robus team into the SRS fold. I’m excited by the expanded horizons that this fantastic group of professionals brings to our capabilities and look forward to further embedding the SRS service philosophy in the European insurance market.”
While Gibraltar is a new domicile for SRS and will maintain its present office space, Captive Intelligence understands the combined Guernsey teams of both organisations will eventually be moving into a new office together.
SRS is now providing management services to captives, open market insurers and reinsurers, insurance intermediaries, MGAs, ILS fund managers, and other corporate entities around the world.
Lloyd’s, UK propositions further legitimising captive concept – Thomas-Ferrand
While the Lloyd’s Captive Syndicate proposition is mostly appealing to the largest, most sophisticated clients it provides an environment for insureds to future proof their risk financing strategies, according to William Thomas-Ferrand, international captive practice leader at Marsh Captive Solutions.
Speaking to Captive Intelligence while attending the Airmic and GIIA Guernsey Conference on 25 June, Thomas-Ferrand said the captive manager was “incredibly proud” to have been part of the infrastructure and community in Guernsey for half a century.
Marsh is celebrating its fiftieth anniversary on the island and Thomas-Ferrand felt the conference was ideal timing considering the rising popularity of captives.
“Captives going mainstream, as Airmic as explained so well the past two years, is a big driver of them becoming more strategic risk financing vehicles,” he told Captive Intelligence.
“The increasing demand for captives from parent companies in all countries is what is leading to the development of new domiciles, as we have seen so successfully in France.”
Lloyd’s potential
While the United Kingdom’s captive framework plans remain on hold as the country awaits the general election outcome on 4 July, Marsh has already helped to establish the first new Lloyd’s Captive Syndicate this century.
Captive Intelligence reported earlier this month that Marsh had worked closely with a large technology multinational and Apollo Syndicate Management Ltd to form Captive Syndicate 1100.
“The challenge at Lloyd’s is that it is quite a sophisticated environment and captives, at least at their outset, are usually designed to be quite straightforward,” Thomas-Ferrand said.
“By partnering with the client and with Apollo on the syndicate management, we can balance the Lloyd’s infrastructure with the captive technology that is needed to manager sophisticasted captives.
“Apollo brings that understanding of the Lloyd’s environment, the reporting required and what’s expected from the managing agent, so in partnership with our captive knowledge, experience, technology and consulting it creates a successful union.”
Thomas-Ferrand believes Lloyd’s will be an effective solution for large multinationals and he has seen several potentially exciting use cases.
“There will be more to come, but prospective entrants will want to look and watch how this first one works out,” he added.
“There is not going to be a mad rush, but I expect there will be a trickle of clients that will want to use Lloyd’s. I believe Lloyd’s will be quite strict in who they accept. They want the leading companies in the world and that’s a great stance to have.”
While the cost and perceived complexity of Lloyd’s ensures it is likely only appealing to the largest clients that are looking for extensive utilisation, Thomas-Ferrand said he believes establishing a Captive Syndicate can “future proof” a company’s risk financing and insurance strategy.
“Do you set up a captive for your needs now, or your future needs? I think with Lloyd’s it is a strategic direction in which you can take your risk financing,” he explained.
“The ability to use the licences all over the world, the strong rating. These are incredibly appealing and valuable tools. They don’t have to be utilised immediately, but it provides the insured with incredible opportunities and negotiating positions that might be useful in the future.”
UK captives & competition
In the UK, Marsh is still hopeful that a new government will push forward with the captive consultation that was originally promised in spring.
The captive manager will be supporting the London Market Group’s post-election letter planned to be delivered to the next Chancellor on 5 July.
“The election brings some uncertainty to the UK captive regime, but we still see clients interested in the UK option despite not knowing if it will be developed,” Thomas-Ferrand said.
“There may be a willingness to assess new options for existing captive owners, but what is more exciting for me is the potential of new prospective captives emerging because they can do it ‘at home’.”
The majority of France’s new captives formed over the past 18 months since a captive framework was introduced has come from new entrants rather than re-domestications.
“I had a recent meeting with a British company that does no business overseas and is struggling with its insurance,” Thomas-Ferrand added. “They’d never considered captives because they would have to use an offshore location, so it opens the door to companies that haven’t felt able to use a captive before.
“We have seen with the amount of American states that have introduced captive legislation the last 15 years, it has proliferated the amount of captives.”
Established domiciles such as Guernsey, which has historically been a go-to jurisdiction for captives owned by UK businesses, are naturally monitoring closely the developments both at Lloyd’s and the wider proposed UK captive regime.
While Guernsey is popular with UK organisations, it is also home to captives owned by businesses from all the world – from the Asia Pacific and South Africa to Scandinavia and the Americas.
“I wondered if there would be an incredibly defensive attitude of the market position Guernsey has developed over such a long time,” Thomas-Ferrand said. “Whereas actually it is being embraced and welcomed as legitimising the captive concept. We can learn a lot from the US that the increase in options leads to a greater utilisation and take-up of captives by everyone.”
GCP #106: Stephen Cross on captive past, present and future
In episode 106 of the Global Captive Podcast, supported by the EY Global Captive Network, Richard sits down with Stephen Cross, Group COO & Head of Innovation & Strategy at broker McGill & Partners.
Stephen has a long background working with the largest complex accounts, particularly those with captives, and worked for International Risk Management Group in the 1990s.
He was then an influential leader within Aon when it bought IRMG at the turn of the century.
Stephen and Richard discuss his career, observations of how the captive market has evolved, the independent versus broker-owned manager debate and what McGill’s role with captives is today and what it could be in the future.
For the latest news, analysis and thought leadership on the global captive market, visit Captive Intelligence and sign up to out twice-weekly newsletter here.
Nick Morgan to join Captive Intelligence
We are delighted to announce Nick Morgan will be joining Captive Intelligence as Commercial Director this summer, to develop our trusted news, analysis and data platform to the next level.
Alongside Senior Reporter Luke Harrison, Nick will be representing Captive Intelligence at the VCIA annual conference in August.
Since launching the Global Captive Podcast in 2019 and Captive Intelligence in 2022, we have quickly positioned ourselves as the trusted source of original insight and sophisticated thought leadership on the booming global captive insurance market.
Founder Richard Cutcher and Nick Morgan worked together at Captive Review from 2014 to 2019, a brand which Nick led for more than 20 years.
“Nick’s vast experience and understanding of the captive insurance market, how it succeeds and what makes it work will be invaluable to Captive Intelligence as we increase the value we provide to the sector,” Richard said.
“Quality content and insight is the bedrock of the Captive Intelligence platform and Nick will only strengthen this proposition.”
Nick joins Richard and Luke at Captive Intelligence with further appointments expected this year.
“As a previous competitor I have admired Richard’s development of first the Global Captive Podcast and latterly Captive Intelligence as quality content products that provide fresh insight to our vibrant sector,” Nick said.
“After a short break hiking the Cornish coast, I look forward to re-connecting with my captive contacts and discussing how we can support you as you grow your captives and captive business.”