As published on The Malta Today on Wednesday 26th February 2013
This week I was walking in drizzling rain down the street leading from Holborn tube station in London towards the venue of the Royal College of Surgeons at Chancery Lane¸ where an event uniquely designed for risk managers called the Captive Live UK¸ a two day conference and exhibition¸ was being held.
FinanceMalta was there with a stand¸ among other Malta-based insurance companies. PKF invested in promoting the island as an ideal place to set up ‘captives’ – be it a PCC or ICC – and encourage investors to consider Malta as a EU jurisdiction where it is possible to maximise the effectiveness of corporate insurance programs.
Among a list of speakers we find Steve Butterworth¸ the same person who helped MFSA set up the captive legislature and procedures in the early years. Other topics in the sessions ranged from issues relating to the onset of new regulations of Solvency II and advice on where to re-domicile your insurance company.
A discussion on how to conduct a feasibility study was chaired by a panel of three namely Alan Fleming (AIRMIC)¸ Julian Philips (R&G) and Tony Welter (Citadel). PKF joined the session and spoke in one of a panel of three discussing the rise of the cell companies and whether they are really the smarter Alternative Risk transfer vehicles that they proposed to be. The central theme concerns the solutions for insurers and reinsurers with international operations of how to best set a captive insurance company and where this is domiciled to mitigate compliance and tax costs.
An interesting subject was how to cover insurance relating to emerging risks¸ such as cyber fraud¸ which was discussed at an interesting session composed of a panel consisting of Philippe Gourand (AIG)¸ Alessandro E. Felipe (Prysmian group)¸ Tony Teixeira (Willis) and Tracey Skinner (Bt Group). A common trend in the sessions was the strategy behind merging and closing inactive captives¸ which is of topical interest in an economic slowdown. Surely inactive captives can be a burden on the bottom line¸ so timely awareness of when to close or re-domicile your captives successfully is an invaluable tool. This involves many tasks such as how to properly assess the factors¸ players and costs involved captive starts underperforming.
While the soft market continues¸ catastrophes have raged on with a number of ever increasing natural disasters. All this points to better understanding of the reinsurance market realities¸ conditions and the captive live event is an excellent venue to meet and discuss latest trends with reinsurance market leaders. Successful captive managers need to actively estimate the market’s capacity and accurately assess the new collateral regime of reinsurance securities agreements. Rising premiums¸ changing regulations¸ and multi-national exposures are some of the challenges facing risk managers¸ and this and other topics will be discussed at this event.