Weathering Insurance Market Storms With Captives

Executive Director, Sherman Taylor explores how captives were used in the past to supplement traditional insurance in hard markets, and how this very important risk management tool can be confidently used by risk managers to navigate the challenges of today's insurance market. *

* Article first published in Captive Review's Cayman Islands report Janurary 2021

The traditional (re)insurance market is continuing to harden and is facing significant headwinds over the next 2-4 underwriting years. The coronavirus pandemic is a rare event that has introduced additional uncertainty into a market that was already under stress from successive years of major catastrophe loss events around the world. The impact of the hard market is already being felt by organisations when renewing their insurance programmes; significant rate increases and difficulty in obtaining required coverage due to diminished capacity of traditional (re)insurers are some of the challenges.