Insure the Unexpected

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The primary source of global captive insurance news and analysis 25 November 2020 - Issue 212

Insure the unexpected

AXA XL’s Owen Williams discusses the current captive market and the most significant challenges facing the industry

Redomestication Focus Latin America

Why companies are redomesticating their Although challenges remain, education has

captives and the opportunities it provides them been key to the region’s captive growth The World’s Leading Independent Captive Manager

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Issue 212

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1349PCP_Captive Review_20200211.indd 1 2/12/20 12:09 PM Contents

News Focus page 07 In this issue Market Insight

Owen Williams discusses the current captive market and the most significant challenges facing the industry

page 19

Redomestication Focus

Industry experts discuss why companies are choosing to redomesticate their captives and the opportunities it provides them

page 22

Latin America

Latin America continues to be one of the world’s largest emerging markets, and although challenges remain, education has been key to the region’s captive insurance market growth

page 25

Emerging Talent Industry Appointments Bron Turner, director, financial services audit at KPMG in Bermuda The latest industry appointments in the page 29 captive insurance market page 32

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DonnyDonny Tong Tong JosephJos Mephona coMonaco Barbara AubryBarbara Aubry SVP,SVP, Business Business Development DevelopmentVP, CVlientP, C Malientnagement Management SVP, BusinessSVP, DevelopmentBusiness Development 212.590.0976212.590.0976 212.303.1746212.303.1746 212.303.4164212.303.4164 [email protected]@suntrust.com [email protected]@[email protected]@suntrust.com News Focus

MAXIS GBN adds new captive tool to its OneClient portal

MAXIS Global Benefits Network (MAXIS GBN) of a captive, including income, expenses and MAXIS stated that the data visualisations high- has launched a suite of new data and digital ser- incurred benefits. light the overall performance, premium and vices on its OneClient portal, including a new expenses distribution, loss ratio heatmaps, interactive dashboard for captive and global risk The interactive graphs enable the captive client results and reserves overview, among other solution (GRS) clients. to identify outliers and badly performing policies. visualisations. The interactive dashboard for pooling clients has also been upgraded to improve This interactive dashboard will be available for all Commenting on the captive dashboard, Helga navigation. MAXIS GBN captive clients and will provide the Viegas, director of digital and innovation, MAXIS latest quarterly data and enable more insight into GBN said: “The interactive captive dashboard was MAXIS GBN explained that pooling clients will the captive programme performance. a much-awaited development after the success- be able to manage new local policies potentially ful launch of our pooling dashboard last year. being added into their global programme with In addition, it includes filters by year, country, We’re constantly investing in our suite of digi- the ability to review new local policies, exclude product, sub-product and policy and provides tal solutions to ensure our multinational clients specific ones and download information about views of the programme on a reinsurance or have the right tools to manage their investment policies previously added. cash basis and allows selection between two-loss in employee benefits.” ratio formulas. MAXIS GBN originally launched OneClient in “Through these digital tools and dashboards, 2017, with the aim to provide clients with access MAXIS explained that a loss development we help clients to better understand the to reports, as well as to compliance and market triangle enables clients to evaluate risks and lia- drivers of spend and develop strategies and data on employee benefits markets worldwide. bilities along with an assessment of premium and interventions to help reduce costs in future,” reserve levels. Viegas added. The employee benefits network relaunched the OneClient portal in 2019 with new analytics tools Meanwhile, the enhanced data visualisations In addition, MAXIS is also launching a new inter- to give its global multinational clients access allow loss ratios to be displayed as an interactive GRS dashboard, which allows clients to to comprehensive claims reports, programme active heatmap by country and product and have a better understanding of their GRS perfor- performance metrics, market analytics and intel- provide a complete performance breakdown mance over their three-year cycle. ligence. ■

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ABTA’s new bonding scheme to ‘protect captive’, says Chris Photi

UK trade association for tour operators and travel and financial services at ABTA, explained: “Chris very large values of pre-payments made for agents ABTA has “significantly departed” from its Photi is stating that in some cases ABTA has 2020 holidays that are being carried forward long-established published bonding scheme to increased bond requirements, which is true in a to 2021.” a new unpublished maximum protection bond relatively small number of cases.” structure in order to protect its captive, which “These values can exceed that which would nor- Chris Photi, head of travel and leisure at White de Vial suggested that Photi has made “a jump mally be held through the winter and into the Hart Associates (WHA), said is “causing difficulties” of logic” because a bond for a particular trader pre-summer booking period, hence a level of for many of its members. has increased when a trader is doing less new bond required to reflect that,” he added. business during the COVID-19 pandemic, Photi explained that ABTA has faced some mate- and ABTA must therefore have changed its de Vial highlighted the ABTA scheme of financial rial failures over the last year, including STA Travel scheme/approach. protection, as a Department for Business, Energy and Cruise and Maritime Voyages, and the impact and Industrial Strategy (BEIS) approved body to its captive is currently unknown. He said: “The reality is that in those cases the scheme, it is required to implement a regime that increased bond reflects an increased value brings all participants into compliance with the He said that such failures have led ABTA to “sig- of customer money held over from cancelled 2018 regulations. nificantly depart” from its long-established bookings in 2020, which the law requires traders published bonding scheme to a new unpub- to protect.” He explained that this is a question of compli- lished maximum protection bond structure ance with the law and providing effective security which he said is “causing difficulties” for many of The travel industry has been hit hard especially to achieve that. It is not a change of policy by its members. recently with the COVID-19 pandemic and the ABTA, it is a change of risk and exposure pattern travel bans implemented across the world. It has as a result of this crisis. ABTA’s members “have had no prior notice or any also been hit in the UK by several travel groups clarity of this new approach”, according to Photi. collapsing including Thomas Cook Group in 2019. “Photi says that this is difficult for traders, and we completely agree,” de Vial stated. The only guidance notes for members are the However, as de Vial pointed out ABTA and ABTA ones available on the ABTA website which was Insurance PCC have been completely unaffected He commented: “The bond market, both with published in February 2015, he explained. (financially) by the impact of the Thomas Cook banks and insurance surety providers is difficult. Group failure. Additional security and costs are common, at a The new bonding approach has not been pub- time when traders can least afford it. But, ulti- lished to members in revised guidance notes ABTA revealed that its captive was not affected by mately, it is a business decision for a trader to and is being implemented on a case-by-case that collapse, which Photi accepted after the UK rebook customers to a future season and to retain approach without prior rounded consultation or travel association recently confirmed this publicly. their funds. With that business decision comes discussion with members. the legal obligation to protect consumer prepay- de Vial dismissed explained that ABTA’s approach ments in relation to package travel.” Photi suggested ABTA’s new approach is evi- has not changed, it is the exposure represented dently to “protect” its captive. by the trader. “Consumer confidence rests, in part, on the assurance of financial protection and it is our role to Commenting on the suggested new bonding He noted: “This is because, for some traders, ensure that ABTA bonded packages are properly approach, John de Vial, director of membership despite a reduction in new business, there are protected,” de Vial added. ■

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VTC001-20_Captive_Insurance_Times_Full_Page.indd 1 1/13/20 7:30 PM News Focus

UK grants Solvency II equivalence to EEA states

The UK Government has revealed that the UK has determine that, for the purposes of Article 5 of HM Treasury announced as many decisions as we granted Solvency II equivalence to the European the Credit Rating Agencies Regulation which will can in advance of the end of the transition period Economic Area (EEA) states, including the mem- form part of UK law at the end of the Transition provided for under the agreement on the UK’s ber states of the European Union. Period, the EEA States are equivalent. withdrawal from the EU on 31 December 2020.”

In the statement, the government confirmed It said: “This means non-systemic credit rating It added: “Granting these equivalence decisions Solvency II regulation will form part of UK law agencies (CRAs) authorised or registered in the provides a range of benefits, including support- at the end of the transition period with the EU, EEA States will be able apply to be certified in the ing well regulated open markets, facilitating stating the purposes of Articles 378, 379 and 380 UK, subject to certain regulatory requirements.” effective pooling and management of risk, and of the solvency regulation will form part of the supporting UK and EEA clients’ access to financial UK law. Endorsement also allows for the cross-border use services and market liquidity.” of ratings between the UK and the EU, which the It explained that the direction covers all three government said will allow UK-registered CRAs In October, Rishi Sunak, the chancellor of the equivalence decisions covering both reinsurance to endorse credit ratings issued from affiliated exchequer, announced that the government had and group capital treatment. EU CRAs which allows them to be used for regu- started the first stage of reviewing the Solvency latory purposes by UK firms. II regulation by calling upon the UK insurance The government also noted that a full set of industry for evidence. Solvency II equivalence decisions for the EEA However, one condition for endorsement is that states is beneficial for the UK by providing cer- the EU regulatory and supervisory framework is The UK Government’s aim of the review is tainty and continuity. deemed to be ‘as stringent as’ the UK framework, to “ensure that Solvency II properly reflects the government explained. the unique structural features of the UK The Solvency II directive, which came into effect insurance sector”. on 1 January 2016, is an EU law that codifies and The Financial Conduct Authority concluded a harmonises the EU insurance regulation. positive endorsement assessment in March 2019. The main objectives of the review are “to spur a vibrant, innovative, and internationally com- Also in the statement the UK Government The UK Government said: “To provide clarity and petitive insurance sector” in order to “to protect revealed that the Credit Rating Agencies stability to industry and reflecting the govern- policyholders and ensure the safety and sound- Regulation Equivalence Directions 2020 will ment’s commitment to be as open as possible ness of firms”. ■

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Captives set to benefit from revisions to Insurance Oversight Act in Switzerland

Captive insurance companies active in For the part of the risks which captives do not supervision under the current regime. Under Switzerland are set to benefit from the partial underwrite from the same group of companies as the current regime, reinsurance captives estab- revision of the Insurance Oversight Act (IOA), described above, Lafita suggested that captives lished in Switzerland are subject to regulatory which regulates the supervision of re/insurance may still profit from a similar regulatory relief on relief according to which tied assets provisions undertakings and insurance intermediaries request of the Swiss Financial Market Supervisory do not apply. in Switzerland. Authority (FINMA), if the relevant policyholders qualify as professional clients under the According to Lafita, the regime of relief for rein- The IOA aims to protect insured parties from the revised IOA. surance will continue under the revised IOA and risks of insurer insolvency and abuses. will be aligned with the new relief for intra-group Professional clients are mainly clients that captive re/insurance and professional clients. The revision areas of the IOA include new possi- have professional risk management with “The main effect of the new provisions relates, bilities to restructure, consumer protection-based certain exceptions. therefore, to direct insurance captives domiciled regulatory and supervisory concept, and insur- in Switzerland or abroad.” ance intermediation. She said: “For the part of the insurance business where the mentioned relief does not apply, the “Direct insurance captives domiciled abroad are Under the revisions, captives that are subject to standard regulatory provisions apply, following mainly subject to Swiss supervision when they Swiss supervision will profit from regulatory relief like this the principle of proportionality.” insure risks located in Switzerland,” she added. when they provide insurance or reinsurance services exclusively to companies of their group that In order to be able to profit from the regulatory Lafita explains that mixing insurance and rein- are not active in the professional insurance busi- relief, captives must state in which business they surance risks within captives subject to Swiss ness of third parties. will be acting within six months from the entry supervision also allows a proportional approach, into force of the IOA. Lafita noted: “They will be the provisions on tied assets not applying to the Diana Lafita, attorney at law at Loyens & Loeff, able to choose between a) wholesale business reinsurance part of the business. an international law and tax firm with offices with professional clients; b) intra-group captive in Switzerland and the Benelux, explained: “In business as described above and c) non-pro- Revision areas particular, they will be relieved from establish- fessional business (with no regulatory relief). A ing tied assets and an organisation fund, as well mixture is allowed with the consequences as Under current law for the right to restructure, as from affiliating with an Ombudsman – the mentioned above.” applicable insurance law obliges the Swiss latter being a requirement for insurers and inde- Financial Market Supervisory Authority (FINMA) pendent insurance intermediaries under the Reinsurance captives that are established outside to order bankruptcy proceedings as soon as revised IOA.” of Switzerland are already excluded from Swiss an insurance undertaking gets into financial

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difficulty. However, the Federal Council sug- solely with professional clients, for example, It also stated that there are to be new special gested that restructuring would be better from large companies with professional risk man- requirements on avoiding conflicts of interest, the insured parties’ standpoint, as they gener- agement that do not have a special need f and, for independent insurance intermediar- ally have an interest in seeing their insurance or protection. ies, on disclosing compensation from insurance policies continue. undertakings or third parties. In addition, the Federal Council noted that there The proposed right to restructure closes this gap is the possibility for small insurance undertak- The federal council said: “As regards the sale of and should strengthen consumer protection. ings with innovative business models to be either certain insurance-based investment products, wholly or partly exempted from supervision. special conduct rules and a duty to provide infor- For consumer protection-based regulatory and mation will be introduced – as has already been supervisory concepts, the bill proposed the intro- On insurance intermediation, the Federal done for financial instruments under the new duction of client categorisation. Council stated that the legislation on interme- Financial Services Act.” diation should be modernised and consumer The Federal Council explained that insur- protection strengthened, in particular by intro- During the consultation, the bill met with a ance undertakings should benefit from ducing a general requirement to affiliate to positive response overall, according to the relaxed supervisory requirements if they deal an ombudsman. federal council. ■

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12 www.captiveinsurancetimes.com News Focus

ProSight onboards four captives outlined that currently, it has four captives of related reinstatement premiums on reinsur- since January launch onboard and three others being launched shortly. ance contracts.

ProSight Global, a property and casualty insur- “In addition, we have numerous high-quality ProSight explained that most of the loss activity ance company, has written more than $19 mil- opportunities in the pipeline,” he added. Ciofani stems from hurricane Laura, which hit the Gulf lion in its captive solutions since launching at the explained: “We see this a direct extension of our Coast of the US in August of this year and the start of this year. It was announced in January niche-driven approach to business in that these California and Oregon wildfires. It also reported that ProSight would expand its insurance solu- customer groups are taking that ‘next step’ in a combined ratio of 108.3 percent compared to tions into the captive insurance market. terms of controlling their own risk management 98.3 percent in Q3 2019, which ProSight said expense, and we are happy to help and provide reflected 11.6 points of catastrophe losses and Anthony Ciofani, alternative markets officer at whatever support and guidance they require.” the impact of related reinstatement premiums ProSight, stated: “We are excited about our entry in Q3 2020 compared to zero points in Q3 2019. into the captive market.” Recently, ProSight reported that Q3 2020 was the largest catastrophe quarter in the compa- The combined ratio excluding the impact of He revealed that since ProSight’s captive ny’s history. The results showed pre-tax impact catastrophes is 96.7 percent for the current launched earlier this year, it has written $19.7 of catastrophes of $22 million, which includes period compared to 98.3 percent for the Q3 million on a year-to-date (YTD) basis. Ciofani over $16.9 million of net losses and $5.1 million 2019. ■

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13 www.captiveinsurancetimes.com News Focus

WTW: ILS market remains resilient amid test and ongoing challenges

With recent tests and ongoing challenges over Other results showed that over 80 percent of Commenting on the report, William Dubinsky, the past three years, the insurance-linked secu- end investors expect to either increase their ILS managing director Willis Re Securities, said: rities (ILS) market remains resilient, according to allocation in the next 12 months or expect it to “The survey suggests that the ILS market may a new Willis Towers Watson (WTW) report on the be unchanged. have adapted more swiftly and effectively than ILS market. generally reported to the challenges posed Meanwhile, about a third of end investors by Hurricane Irma and subsequent events The report showed that most end investors are indicated that they had postponed new ILS allo- over recent years, but the story is not over. satisfied with their ILS performance, with 86 per- cations as a result of COVID-19. Notwithstanding guarded optimism, COVID- cent of ILS funds expecting market growth of 5 19 and continued uncertainty around other percent or more cumulatively during the next At the end of 2019, before any potential property-related losses have created additional five years. impacts of COVID-19, two-thirds of ILS funds challenges for end investors, ILS funds, and ced- reported trapped collateral of 5 percent or less ants alike.” It also highlighted that more than half of rein- of their assets under management, according to surance and insurance companies surveyed the survey. Nadia Schmidt, alternative capital practice group worldwide now use ILS capacity. leader, Willis Re International noted: “The survey It also revealed that four in five fund manager also reveals some disconnects. Insurers and rein- The survey was conducted between June and respondents expect climate change to create surers would like to use ILS capacity to protect August 2020 and included 122 global ILS market significant threats and opportunities for the ILS risks beyond natural catastrophes, like cyber and participants to provide a snapshot of the views market during the next five years. casualty risks, but end investors have little appe- of the ILS industry. tite. Investors and funds see steady growth ahead, The use of ILS remains stable over the last but some buyers have been more restrained in Participants came from four segments including two years with, similar to 2018, over half (56 their behaviour towards ILS.” end investors, ILS funds, insurance and reinsur- percent) of insurers and reinsurers accessing ance companies, and corporate risk managers. ILS capacity. “However, these seem to be relatively minor concerns. Overall, our survey reveals that ILS capacity The survey showed that across the board, ILS However, only 17 percent, down from 27 percent providers and ILS capacity users alike remain funds and end investors expect further growth in 2018, still derive more than 20 percent of their committed to the market and feel positively driven by factors such as the impact of climate capacity limit from ILS. about the health and future of ILS,” she added. change and the positive ESG characteristics of ILS. Elsewhere, the survey showed that 70 percent The survey constituted 58 providers of ILS capac- End-investor respondents identified non-ca- of the North American insurers and reinsurers ity and 64 capacity users including insurance and tastrophe weather insurance (64 percent) and life, who access ILS capacity derive between 11 per- reinsurance companies and corporate risk man- accident and health risks (46 percent) as suitable cent and 30 percent of capacity from ILS, while agers. It aims to capture global and regional for ILS mandates, but less than a quarter found 70 percent of their international counterparts trends with 44 percent of capacity users respond- appeal in ILS for other perils, with only 5 percent say ILS is the source for less than 10 percent ents coming from North America and 56 percent interested in securitised cyber risk. of capacity. coming from the rest of the world. ■

14 www.captiveinsurancetimes.com Industry Appointments

News Focus

brings 40 years of actuarial experience in the re/insurance industry to Aspen. Pacific Life Re completes UK longevity swap via Guernsey-based captive Prior to managing his own consulting firm, Pacific Life Re, who manage clients mortality, Murphy said: “We are delighted to have andhe servedfollowing as a executivevery competitive vice president process includ and- longevity, and morbidity risk, has completed a worked with the Trustee of the Prudential Staff inggroup many chief bidding actuary reinsurers, at Validus Pacific Group Life from Re longevity swap transaction with the Trustee of Pension Scheme and Willis Towers Watson on was2010 selected.” to 2019. He also held various senior- the Prudential Staff Pension Scheme. this transaction.” level roles for Fireman’s Fund, Endurance, and KPMG. “We were pleased to be able to build on the

The longevity swap covers pension liabilities She added: “This transaction demonstrates the trustees’Mark Cloutier, in-depth executive understanding chairman of andthis of £3.7 billion relating to over 20,000 pension- continuingAndrew Kudera strength hasand capacitybeen appointed of the rein- typegroup of chief transaction executive to officer,help them commented: achieve ers in the scheme and was structured using a suranceexecutive sector vice to supportpresident pension and schemegroup attractive“Welcoming terms an industry-leadingthat reduce risk expert and Guernsey-based captive insurance company. de-riskingchief actuary in a time ofof increased Aspen uncertainty Insurance with enhanceof Andy memberKudera’s security. quality The to transactionour team Holdings (Aspen), effective 3 increases our capabilities, allowing us regards to future life expectancy.” demonstrates both the appetite of defined February 2020. to transform our business, simplify and The swap aims to protect the scheme from the benefit schemes to de-risk their liabilities enhance our operations, and increase financial risk of an unexpected increase in life WillisAspen’s Towers previous Watson group led the chief advice actuary, for the Paul trus- andaccountability how transactions across thesecan be functions.” successfully expectancy and to make the scheme more secure teeFrydas, and CMS will provided assume external the new legal role counsel of chief for structured within the current environment,” to the benefit of all its members. Pacificanalytics Life officerRe. and will lead strategic he“Kudera’s concluded. capabilities and fresh pricing, aggregation management and perspective, paired with Paul Frydas’ modelling. Frydas will remain chief actuary considerable expertise and experience, Elaine Murphy, longevity director at Pacific Life Re, Ian Aley, head of transactions at Willis Towers In addition, in June, the Willis Pension Scheme for Aspen Insurance UK, Aspen Managing will create a strong partnership across explained the completion and size of the deal as Watson, noted: “This transaction follows a entered into a longevity swap transaction with Agency and Aspen Bermuda.Kudera complementary disciplines,” he adds. a “huge achievement” despite the challenges of period of working with the trustee to identify Munich Re to manage longevity risk concerning the COVID-19 pandemic. the optimal solution. Within a vibrant market £1 billion of pensioner liabilities. ■

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40 Captive Insurance Times - Issue 192 15 www.captiveinsurancetimes.com News Focus

Labuan reports a strong H1 with Civen and GIC acquire insurance broker Miller seven new captives

Specialist insurance and reinsurance broker and China Pacific Insurance group in China. The Labuan International Business and Financial Miller Insurance has been acquired by Cinven, Centre (IBFC) has seen more than 50 percent the international private equity firm, and Yong Cheen Choo, chief investment officer of increase in licensing application approvals for H1 GIC, Singapore’s sovereign wealth fund from private equity, GIC, said the company look for- 2020, resulting in more than 800 licensed entities its partners and corporate member, Willis ward to supporting Greg Collins, CEO of Miller, currently operating in the domicile. Towers Watson. and his team on future expansion opportunities for Miller. In reinsurance, Labuan IBFC continued to see The transaction, which is expected to complete growth in the insurance industry with 11 new Q1 2021, represents the first investment from Choo added: “As a long-term investor, we are licenses being approved of which seven were Cinven’s new financial services sector-focused confident in the growth potential of the spe- captive insurance entities. strategy, which will be looking at similar long- cialty insurance sector, and of Miller within it.” term opportunities across Europe. “Captive insurance is certainly growing in size as Commenting on the acquisition, Collins it now attributes 31.4 percent of total gross pre- Financial details of the transaction are explained: “We are very pleased to be partner- miums underwritten in Labuan IBFC, amounting not disclosed. ing with Cinven and GIC, whose knowledge to $267.9 million with 72.8 percent of the total and insurance investment expertise will enor- captive premiums from international markets,” Miller, which operates in the UK, Lloyd’s and mously support our business as we enter this Datuk Danial Mah Abdullah, director-general of internationally, works across a number of spe- important next phase of growth.” Labuan Financial Services Authority (FSA) said. cialist areas, including marine, energy, credit and political risks, delegated authorities, pro- He noted: “We are excited about bringing Abdullah continued: “This is in line with the sta- fessional risks, property, casualty, sports and together our combined expertise to bolster our tus of Labuan IBFC as a regional wholesale risk entertainment and reinsurance. best in class client service and solutions and intermediating centre. In fact, for the first half of strengthen Miller’s position in our core activi- 2020, 64.5 percent of total gross written premi- Headquartered in London, it places approxi- ties. This includes making incremental targeted, ums of the reinsurance industry originated from mately £2 billion worth of premiums annually. strategic investments as we look to realise our international markets.” ambition of becoming the leading independ- Miller also has offices in Ipswich, Brussels, Paria, ent specialist reinsurance broking firm. I would “We expect this percentage to increase as we Singapore and Geneva. also like to take this opportunity to thank Willis develop Labuan even further as a centre of risk Towers Watson for their support over the last management and reinsurance through inno- Cinven Funds has previously made investments five years.” vation. For instance, Labuan IBFC is the only in the European insurance sector including jurisdiction in Asia that offers protected cell Guardian Financial Services in the UK, Eurovita Luigi Sbrozzi, Partner of Cinven, commented: companies (PCC),” he added. in Italy and Viridium in Germany. “Miller is a highly attractive, resilient specialist insurance business with strong long-term In September, Labuan IBFC reported that it regis- It has also made other UK-headquartered finan- growth opportunities across all of its segments tered seven new captives between January and cial services investments such as Partnership and a history of consistent growth through var- June this year, bringing the total to 56. Assurance, NewDay and Premium Credit. ious economic cycles. We see opportunities both organically, by recruiting new specialist Farah Jaafar-Crossby, CEO of Labuan noted: “The Meanwhile, GIC has invested in Rothesay and brokers, and through incremental mergers and growth in licensed entities definitely evidences RAC in the UK, Mass Mutual Asia in Hong Kong, acquisitions over time.” ■ Labuan IBFC’s relevance as intermediaries

16 www.captiveinsurancetimes.com News Focus

continue to look for safe harbour jurisdictions, that are well regulated to international standards set by global multilateral organisations.”

Speaking at the Asian Captive Conference (ACC) earlier today, Abdullah outlined in his opening remarks, “notwithstanding the challenges and movement restrictions due to the COVID-19 out- break, we are glad to continue to have growth, an increase in licenses approved during H1 2020”.

“Having said that, we remain cautious on the US Treasury proposes rule changes to TRIP, outcome in the second half of the year but including participation of captives am optimistic that we will pull through this ‘COVID-19 rollercoaster year’ on a positive note,” The US Department of the Treasury has It noted that comments must be in writing and he added. issued proposed rules to implement technical encourage early submission. The deadline is by changes, including the participation of cap- 11 January 2021. “We in Labuan FSA are cognisant of the COVID- tives, to the Terrorism Risk Insurance Program 19 situation. Other than the safety precautionary (TRIP) required by the Terrorism Risk Insurance Background measures, we have provided regulatory reliefs Program Reauthorization Act of 2019. aimed at alleviating the operational difficulties of After the 9/11 terrorist attacks in New York in the market. We will continue to support the mar- The proposed rules include clarification on 2001, the majority of businesses could not pur- ket players during this difficult and challenging how the treasury will calculate property and chase insurance protection for future terrorist time as we navigate the ‘new normal’ together. casualty insurance losses for purposes of con- attacks as the attack on New York cost an esti- We are always engaging with our players on this,” sidering certification of an act of terrorism and mated $40 billion. he concluded. ■ insured losses when administering the financial sharing mechanisms under the programme. TRIP, a federal law was enacted and signed into law by President George W. Bush on 26 The proposal said this would include the pro- November 2002. TRIP provides for a transparent gramme trigger and programme cap; and system of shared public and private compen- incorporate into the programme rules prior sation for insured losses resulting from acts guidance provided by the treasury in connec- of terrorism. tion with stand-alone cyber insurance under the programme. The act has been extended four times, most recently in December 2019, the House of The treasury is also seeking further public Representatives voted to approve the Further comment concerning the certification process Consolidated Appropriations Act, 2020, under the programme, and the participation which included the 2019 Reauthorization of captive insurers in the programme, to facil- Act. President Donald Trump signed the bill itate further analysis and study by the Federal into law. Insurance Office (FIO) of the programme and potential future rulemakings in these areas. It is scheduled to expire on 31 December 2027. ■

17 images by orhan_çam/adobe.stock.com www.captiveinsurancetimes.com B++ Good Market Insight - Maria Ward-Brennan reports

Insure the unexpected AXA XL’s Owen Williams discusses the current captive market and the most significant challenges facing the industry

What are the biggest trends in the captive industry right now?

By far and away the biggest trend in the captive industry is the effect of the hardening of the insurance and reinsurance market. This is having three main impacts on clients. The first is an increase in pricing for most lines of insurance and reinsurance. The second is a retraction of capacity – clients cannot currently always secure the capacity they require from the insurance market. And thirdly, the breadth of coverage to which clients have become accustomed is not always available.

Clients are using captives to counteract all three of these effects. Many are taking larger primary layers within their captive to reduce the cost of their insurance spend. Clients are also using captives to fill gaps in their tower where they cannot find capacity in the insurance market. And risk managers are using captives to obtain coverage for their corporate entity that isn’t readily available in the insurance market or where terms and conditions have severely tightened.

Clients are using existing captives more and we are also seeing great interest in setting up new captives. We are certainly seeing increased numbers of captive feasibility studies being undertaken at the moment.

19 www.captiveinsurancetimes.com Market Insight

that will not be the case. Risk managers and We are certainly seeing an uptick in inter- “Putting risk into a captive insurance buyers are not necessarily used to est in captive formations and I would expect is not the same as buying this situation or communicating the fact to their captive numbers to increase, globally, boards. A captive can help to lessen the impact this year. insurance from an insurer” of the hardening insurance market. It reduces a company’s reliance on insurance and its exposure to the vagaries of the insurance cycle. Moving forward, what you do How has COVID-19 impacted expect to see over the next few the captive industry? Do you It’s important to remember, however, that put- years within the industry? What think it has had a positive or ting risk into a captive is not the same as buying will be the biggest talking points? negative effect? insurance from an insurer; as a captive owner, you are taking on risk rather than transferring It will be interesting to see if those companies First and foremost, COVID-19 has been a human it. Taking the time to discuss forming a captive, that currently are exploring setting up a captive, tragedy on a huge scale. And it continues to affect or putting more risk into an existing captive, in or expanding current captives, continue with that societies and industries across the world. For the a strategic way, is vital. I would urge clients not strategy when conditions in the insurance mar- captive industry, it is probably too early to say to rush forming a captive and its relevant insur- ket change. Many will likely continue to use their what the medium and long-term impacts will be. ance/reinsurance structures as a response to the captive as an important part of their risk manage- conditions in the insurance market, but instead ment and transfer strategy even when capacity The pandemic has probably contributed to what to take the time to talk about it with their bro- and coverage become more available in the tra- was an already hardening insurance market, kers, advisors, captive managers and others in ditional market. particularly with respect to the availability of order to fully understand what can be achieved coverage for risks such as non-physical-damage and what the longer-term plan might be. Early I think the ability of captives to take on unin- business interruption. Many clients are looking engagement from all partners and providers in surable or intangible risks will be one of the to use captives to respond and I would expect to those discussions is important. biggest talking points in the months and years to see greater use of captives for non-insurable risks. come. Most risk managers’ risk registers contain several risks that cannot be insured in the tradi- Do you think 2020 has been tional sense. If this year has shown us anything, What do you believe are the a positive year for the captive it is that unexpected, uninsurable risks can and most significant challenges industry? Are you expecting to do happen. firms are currently facing? see overall captive formations increase for this year? In the past, captives were typically used to Beyond the very immediate impacts of the pan- provide capacity for more run-of-the-mill, demic, such as uncertainty about companies’ This year has certainly provided an opportunity well-understood property and casualty-type risks. ability to trade and the effect of restrictions on for captives to demonstrate their relevance and But the current pandemic and its effects, both the movement of people, the number one con- value to their corporate owners. on the insurance market and society and indus- cern for risk managers is the hardening of the try more widely, have prompted interest in using insurance and reinsurance market. Following the prolonged soft market period, cur- captives to underwrite risks that are not currently rent insurance market conditions mean that risk insurable in the traditional market. For the past several years, risk managers and managers increasingly now are able to show their insurance buyers have been able to go to their boards the cost and coverage benefits of having I believe that the ability of captives to play a boards showing year-on-year price savings on a captive, as well as the longer-term strategic part in managing and transferring emerging insurance and expanded coverage. This year, benefits that a captive can bring to an enterprise and previously uninsurable risks will be a major however, for the first time for a very long time risk management programme. talking point. ■

20 www.captiveinsurancetimes.com Corporate | Funds | Capital Markets | Private Client

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Plus representative offices in the US and Africa Information about our regulators is available online Redomestication Focus - By Maria Ward-Brennan

Relocation, relocation, relocation Industry experts discuss why companies are choosing to redomesticate their captives and the opportunities it provides them

Choosing the right domicile is an impor- Adam Miholic, senior consultant, cap- “Many of these conversations are a result of two tant part of the set up of forming a captive tives at Hylant, explains that the main environmental factors: the current eco- insurance company. evaluation of a captive’s current dom- nomic status for many captive owners during this icile should be an annual focus, which challenging environment, and the intense focus However, things can change within a business often means taking the form of legisla- of some states to actively seek out and impose which mean the original domicile isn’t always the tion or operational update at the board of taxes and/or fines on captive owners who have forever home of the captive. directors meeting. domiciled out of their ‘home state’,” he adds.

Changes can vary as well as unpredictable However, Miholic notes that many current and uncontrollable, for example, regulatory captive owners are proactively seeking the guid- Reasons for redomestication changes, a change in the regulator personnel, a ance from their managers and advisors on what change in the service provider as well as various impact, if any, a domestication of the captive As mentioned above there are a number of fac- other factors. may have. tors why a captive chooses to redomesticate.

22 images by orhan_çam/adobe.stock.com www.captiveinsurancetimes.com Redomestication Focus

Miholic suggests that most redomestications Under section 831(b) of the US tax code, captive Opportunities occur when the parent company/companies insurers that qualify as small insurance com- experience a change in operations or structure panies can elect to exclude limited amounts of Although there are very few challenges that impacts the captive. annual net premiums from income, so that the associated with redomestication, Miholic captive pays tax only on its investment income. says it has the opportunity to provide He says: “These changes could stem from both financial and operational benefits to merger and acquisition activity, corporate captive owners. legal or tax structure, ownership transitions, Procedure and many more. No matter the genesis of the He suggests that potential tax benefits change, the redomestication process should Before captive decides to relocate it should com- and annual fees are often a focus of the always focus on ensuring the captive remains plete a full analysis of the current domicile as well financial considerations among active aligned with the goals and objectives of the as the proposed new jurisdiction. captive domiciles. parent company.” Miholic suggests that a thorough review of the “In addition, many captive owners are interested Martin Eveleigh, chairman at Atlas Insurance strategic, operational, and financial aspects of the in active captive regulators who offer the flexibil- Management, says that reasons can domiciles should be considered. ity and control commonly associated with captive vary considerably. insurance,” he adds. He adds: “Once a decision has been made on In some cases, Eveleigh explains it can be the redomestication, it is important that all require- As both new and existing captive domiciles unwillingness of some banks and investment ments pertaining to notifications, claims and update their legislation to reflect the needs of the managers to open accounts for foreign captives policy administration, and legal matters are fol- industry, Miholic explains that many current cap- leads to a move onshore while in others it can be lowed in order to properly transition the captive tive owners also re-evaluate their business plans. a change to a captive’s business plan, expansion to another jurisdiction.” of its underwriting activities or new fronting or Eveleigh says apart from any beneficial tax reinsurer relationships can lead to a reassessment Eveleigh adds that the process is different consequences, there are three main types of domicile choice. depending on the domicile in question. of opportunity.

He states: “This is particularly true where the “In essence, there is a regulatory process in which The first is for the captive to present itself differ- captive is established in one of the lesser the captive seeks approval from its existing ently to those with whom it does business. offshore domiciles.” home regulator to leave and approval from its new domicile for the move and the issuance of He says: “For example, a fronting company may Eveleigh also suggests there have been some an insurance licence there,” he explains. be influenced by the domicile of a captive that captive owners choose to move onshore as a needs access to the admitted paper.” result of the Internal Revenue Service’s (IRS) cam- Alongside that, Eveleigh notes, there is the legal paign against captives taking the 831(b) election; process of moving the company from the corpo- The second that Eveleigh notes is the opportu- the concern being the consequences of revoca- rate register of one domicile to that of another. nity to transact business that is permitted by the tion of a 953(d) election. new domicile but not the old. He highlights that a redomestication does not The IRS ramped up its scrutiny in November involve the replacement of one corporate entity Finally, he explains there is the opportunity to 2016 with the release of Notice 2016-66, which with another; the company that arrives in the take advantage of different company law regimes, identified certain micro captive transactions new domicile is the same corporate entity as the perhaps by using a corporate form available as having the potential for tax avoidance one that left the old domicile. Although he does in one jurisdiction but not another such as a and evasion. explain that it will be subject to different laws. series LLC. ■

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A lesson in captives

Latin America continues to be one of the world’s largest emerging markets, and although challenges remain, education has been key to the region’s captive insurance market growth

Recognised as one of the world’s fastest-grow- According to the MAPFRE Economic COVID-19 ing emerging markets, Latin America is starting Research in 2018, Brazil’s premium vol- to gain more traction, particularly in its captive ume was worth $57.57 billion, versus the The captive market has been around for decades insurance industry. second largest, Mexico, at $27.25 billion. In and went through different insurance cycles and comparison, Argentina, Chile and Colombia pandemic risk events. Adriana Scherzinger, head Although not every country within the Latin come in at $13.93, $13.85 and $9.22 of international business and captive services at America region is excelling, Colombia and Mexico billion respectively. Zurich, suggests that the growing interest in (re) are leading the way. insurance and risk transfer solutions means cap- Fox explains that Brazil’s reinsurance monopoly tives will remain, as they are, “a valuable mainstay Eduardo Fox, Latin America consultant, pri- stopped its international growth, however, with for addressing the need in self-insurance”. vate client and trusts and corporate at Appleby, the help of business partners, there is a huge explains that traditionally both countries have effort to revive the captives’ interest and com- Even before the breakout of the global COVID- been at the frontline of the industry, due to pany formation. 19 pandemic, following a prolonged soft market their advanced knowledge of offshore and cap- cycle, insurance premiums had been rising. tive markets and have tax information exchange He says: “We are also in renewed talks to finalise agreements (TIEA)’s in-effect with Bermuda and negotiations and put the signed TIEA into effect, In this environment, Latin American customers other global jurisdictions. in order to fully affect transactional work.” and brokers are facing increasing challenges.

Although Colombia has the advantage at the Argentina and Chile, both with TIEAs in-ef- Scherzinger says: “Increasingly, customers need moment, due to the consistency and unity of fect with Bermuda and possibly other offshore to manage their incubating risks, increased their markets, according to Fox, Brazil could jurisdictions and neo-progressive industries’ deductibles, greater risk retention and increased have been the leader not only because it has the regulators, are next on the list and already reinsurance premiums as best as they can. These largest economy in Latin America but because making serious plans and enquiries, on which factors lead to increased use of captives, with they have the largest insurance market in we are advising at the moment, according new formations and expansion in several cover- the region. to Fox. age lines.”

25 images by elena_suvorova/stock.adobe.com www.captiveinsurancetimes.com Latin America

Ecopetrol, was pivotal in the development and a complete picture of how captives can create “We could cautiously aim creation of, not only one of the first captives from value for them. for progress and growth that country, its own Black Gold Re but several other captives,” he says. Scherzinger also emphasises that education for in captive formations growth in Latin America’s captive industry pre- from the region, beginning Such influence continues to date and has given sents a major opportunity. rise to a renewed view of captive formation plan- in Q2 2021” ning, efficient offshore investment and formation There has been a lot of progress in the region of risk coverage vehicles. over the last few years; knowledge of captives has deepened, and they have become more accept- Fox highlights that there has been a new wave able as a result. of interest from Brazil, which has re-opened its market to the international reinsurance market, With the rapid growth in captive utilisation, she following the abolition of the 70-year-old rein- comments: “A number of factors are behind this, surance monopoly of the Instituto de Resseguros such as the evolving role of risk management, do Brasil (IRB), and has resulted in private/public changes in the needs of insurance and risk man- sector joint ventures and their linking with global agers, increased education and promotion of the service providers, in order to form captives or captive sector in the region among insurance car- Even though few of the more recently created other reinsurance vehicles outside of the ex-mo- riers, brokers, captive managers and regulators.” captives specifically cover pandemic-related nopoly’s influence. losses, Latin American companies are making use Fox also weighs in suggesting that education is of their captives which are designed to support “crucial and useful” to both the public and private them through the COVID-19 pandemic. Education is key sectors in the region.

“The result is that the captive owners are better able Latin America’s captive industry has always strug- He explains: “During our business development to respond to their risks, which leads to better pro- gled with a lack of education in the sector, which visits, face-to-face meetings/presentations with tection of their employees and assets,” she adds. has been a contributing factor to its minimal potential private sector clientele, their risk man- growth over the years. agers and brokers/advisers, combined with Agreeing with Scherzinger, Fox predicts that discussions with the public sector, require clear there will be a promised rise to continue next Alejandro Santos, Marsh advisory, analytics and and concise guidance on the usefulness and year for a number of reasons. captive solutions, Latin America and Caribbean advantages of establishing a captive.” (LAC), states that education related to captive Fox explains that the adaptation of Latin concepts and risk management is one of the “For example, Bermuda negotiated and obtained America’s private sector to the “new normal” most important factors to help promote captives the first offshore jurisdiction’s TIEA with Mexico, has created an unprecedented level of innova- in the region. which was also the first with a Latin American tion in planning and strategy that will deliver nation, through a robust learning process positive results. He suggests that there is now Large multinational companies know captives between the two governments’ International more knowledge sharing and exchange of ideas quite well, with several of them operating their Treaty teams. This TIEA was signed in October between industry members. insurance programmes using captives as a means 2009 and came into effect in January 2011, to reduce cost, increase flexibility on coverages, and became the Organisation for Economic “A good example of such cooperation can be seen and provide alternatives for lack of capacity. Co-operation and Development (OECD)- within the Energy industry of Colombia, where However, Santos highlights that many local com- compliant international standard for the rest of the giant, mixed stock-holding corporation, panies and smaller multinationals do not have Latin America.”

26 www.captiveinsurancetimes.com Latin America

Fox suggests that if the education process in and reporting obligations to disclose information market in Latin America remains positive with Latin America was not patiently conducted, about ‘reportable schemes’, similar to the OECD Scherzinger expecting to see increased captive “Bermuda would not have obtained the repu- guidelines for mandatory disclosures.” utilisation across Latin America over the next tation it earned from the governments of the 12 months. region or the establishment of an estimated two- This will be effective from 1 January 2021 and thirds of Latin America’s world-wide captives”. the measures will define tax benefit as reduction, A hard market could prompt risk managers avoidance or deferral, with tax advisors as the pri- to decide to finance more risk within captives mary responsible party.She highlights that one because of traditional market underwriting Regulation evolving focus of Latin American governments restrictions or pricing. is on anti-deferral rules, to prevent the accumu- Aside from the previous challenges around edu- lation of wealth without appropriate reinsurance Scherzinger highlights: “I am seeing more interest cation in Latin America, regulation has also been coverage. Unlike Chile and Peru, Brazil does not from customers looking to better manage their a key factor stubbing the growth of the region’s yet have these rules in place. multinational exposures. They are looking for sta- captive industry. bility and certainty in these unprecedented and “Overall, the efforts of Latin American govern- uncertain times.” Discussing if new regulations are being imple- ments have the common objective of increasing mented to help the growth of captive insurance the amount of tax they collect,” Scherzinger adds. Although Santos believes that there are many in Latin America countries, Scherzinger states hurdles to tackle within the region, he predicts that Latin American governments are taking Additionally, Juan Pablo Cuartas, Carpenter that in the near future, there will be many oppor- a ‘substance-over-form’ approach with general Marsh Fac, captives vice president, Latin America, tunities for new formations as well as more active anti-avoidance rules (GAARs). states that they are not seeing specific captive-re- utilisation of existing captives.Santos notes that lated regulation in the Latin America region. the key to a successful project is to focus on the The aim is to establish a clear direction to taxpay- strategic use of the captive for risk management. ers so that they can define substance in the view However, he notes: “Some countries are relax- of tax authorities. ing their insurance and reinsurance regulations He explains: “This includes a risk retention review through law and tax reforms and that might to determine whether a captive is feasible to This is currently being codified for the first time eventually result in changes favouring the cre- assist in increasing flexibility in the underwriting in Colombia, Peru and Brazil. Mexico has recently ation of captives.” process; accessing reinsurance market capacity or introduced GAARs to ensure that new captives facilities; and reducing the cost volatility of insur- are formed for business rather than tax reasons. In addition, Santos suggests that as each country ance for the organisation.” in Latin America is facing its own political chal- Scherzinger states that in this instance, business lenges, in many cases, law reforms and regulator Once we see scientific advance in controlling or reasons are defined as objectives such as risk decisions may come with consequences in terms minimising the effects of the pandemic and that retention, actual risk transfer and asset protec- of market capacity restrictions, so captives could there is more economic certainty in the world, tion. With any loan structure established through be a way to add capacity for some specific lines, Fox believes that all parties involved should a captive, Mexican captive owners must record in such as director and officer (D&O). emerge stronger and better equipped to recover writing the business reasons behind such lending. Latin America’s captive market.

She says: “Many Latin American govern- What next? Assuming a return to a ‘new normal’, after COVID- ments are moving towards the promotion of 19, Fox concludes: “We could cautiously aim for transparency and exchange of information, par- Although it may be hard to paint a picture of the progress and growth in captive formations from ticularly Colombia and Mexico. Again, Mexico future given the ongoing uncertainty around the the region, beginning in Q2 2021 and exponen- also recently introduced transparency measures pandemic, the outlook of the captive insurance tially growing after that.” ■

27 www.captiveinsurancetimes.com C

CMY

K Emerging Talent

BronDirector, financial Turner services audit KPMG in Bermuda

Personal bio: For the past seven years, I fantastic. It is important to me to be accessible, of Port Elizabeth) and I’m a CA(SA) and certi- have resided in Bermuda. From my accent, to spotlight my energy on delivering on prom- fied public accountant. you would know I hail from South Africa. I am ises and contributing to a consistent standard passionate about learning, personally know- of excellence. Since joining KPMG in Bermuda in 2013, My ing more and sharing that with clients and focus has been on insurance, reinsurance, and colleagues. People interest me. Professional profile: I have over 10 years captive clients. My experience in the captive of experience providing audit and advisory sector covers all structures across various I am enjoying creating the path for people to services to a variety of industries, and have traditional and emerging risks and I was a be their most successful selves, to work to their been based in South Africa, London and panellist at the Bermuda Executive Forum in strengths, expand their comfort zone and to Bermuda. I have a Bachelor of Commerce Miami, speaking on captive solutions, strat- ultimately achieve beyond their expectations. - Accounting (Honours) from the Nelson egies and innovations. I have also had the Watching those I work with have success and Mandela Metropolitan University in Port privilege of leading global multi-disciplinary knowing I played even a small part in that is Elizabeth, South Africa (previously University and multi-location engagement teams.

www.captiveinsurancetimes.com Emerging Talent

How did you end up in incorporations in new industries such as can- the opportunity to see some incredible, inno- the captive industry? nabis and crypto. However, the highlight for vative solutions. I’m able to collaborate with me has been working with Butler University’s industry professionals that cover all aspects of There are many reasons why I chose to come to student-run captive. I’m a big supporter of a captive’s lifecycle, and witnessed first-hand Bermuda, but the key reason was its reputation ‘on-the-job’ learning, and what better way to the pragmatism of the regulator bringing inno- as a world-leading financial services jurisdiction. learn how this industry works than incor- vative solutions and tailored regulation to the Little did I know that Bermuda was, and still is, porating and running your own captive market. It’s an exciting space to be working the leading captive domicile. insurance company. in right now.

As a leading service provider, KPMG has afforded I have the pleasure of hosting the students every me the opportunity to work on a wide range of year for an educational ‘lunch & learn’ session What is your impression (re)insurance clients including captives. And and it’s been fantastic to see how engaged they of the industry? having taken up a leadership role in the captive are and the ideas they bring to the table clearly sector, I have the privilege of working closely with demonstrates the value of practical learning. Agile, able to adapt quickly, innovate and key stakeholders across the island, and globally. stay current.

What/who have been your What has been your highlight influences in the captive industry? What are your aspirations for your in the captive industry so far? career in the captive industry? I think the Bermuda marketplace has been my That’s a great question as I’ve been fortu- biggest influencer. As the largest captive domi- Captive sector lead at KPMG in Bermuda and nate enough to have been involved in captive cile in the world, Bermuda has provided me with KPMG Islands Group; working closely with industry professionals across all service providers promoting the captive concept globally and edu- cating aspiring professionals on the role a captive insurance company can play in an organisation. I worked with Bron as our external auditor for multiple years. I found him to be highly

responsive and open in his communications with us, which was critical in ensuring there

were no surprises. He is receptive to feedback and seeks to make the process better What advice do you have each time. His technical knowledge of US Generally Accepted Accounting Principles and for someone considering SOX matters allowed for a collaborative exchange of ideas and positions and was highly a role in the industry? valued throughout the audit process. Captives are a critical risk management tool for all types of companies. A key component of our audit was the management of multiple jurisdictional audit

teams. Through regular meetings and discussions, Bron managed those other teams As insurance rates harden, more companies are

successfully and kept us up to date on the status of the work. Bron was proactive in turning to captives to ease pressure on premium spend while retaining insurance protection and identifying possible issues or bottlenecks and worked with us and the other audit teams financial flexibility. Existing captive owners are to resolve any matters in a timely fashion. re-looking at ways to better manage their current captive to its full potential. The opportunities are David Shead, assistant vice president, professional liability, Markel Speciality quite endless for anyone willing to think beyond the traditional. ■

30 www.captiveinsurancetimes.com

Industry Appointments

Artex Risk Solutions has appointed Adrian Lynch as executive vice- Tennessee governor Bill Lee has appointed president North America, effective March 2021. Carter Lawrence as commissioner of the Tennessee Department of Commerce and In this newly expanded role, Lynch will be overseeing day-to-day operations in our Insurance (TDCI). responsible for the oversight and growth of Mesa office. Artex’s captive management offices across the Lawrence currently serves as chief deputy US, Bermuda and the Cayman Islands. He will Artex thanked Heffernan for his “innumerable commissioner and chief operating officer at report to Jennifer Gallagher, president of Artex contributions” and wished him well on the next the TDCI. North America. stage in his life’s journey. In addition, he worked on Tennessee’s economic Lynch will join Artex after fulfilling his con- Commenting on Lynch’s appointment, recovery group throughout the COVID-19 pan- tractual obligations to Aon captive and Gallagher said: “Adrian Lynch brings us valuable demic, assisting governor Lee’s efforts to reboot insurance management. He has served as expertise and is a proven leader in the captive the state’s economy. captive strategy leader for the Americas and insurance marketplace.” managing director of Aon Cayman for the past Lawrence’s appointment comes after Hodgen seven years. “Our growth strategy will be enhanced by his Mainda, the previous commissioner stepped strong history in business development and down from the role after just one year. As part of this transition, Kevin Heffernan, exec- sales. He is a great fit for our culture and I’m utive vice-president, has announced his plans looking forward to working alongside him as Commenting on his new role, Governor Lee said: to retire from Artex in March next year. we continue to build our enterprise,” she added. “Carter Lawrence is a proven public servant who has stewarded key priorities for the administra- Heffernan has been with Artex for 15 years in a Last November, Lynch, who is a deputy chair of tion throughout his tenure and I’m confident he’ll number of operational and domicile manage- the Insurance Managers Association Cayman continue to support Tennessee businesses and ment roles. (IMAC), discussed with Captive Insurance Times consumers with integrity.” about what the association is currently working For the past 14 months, Heffernan has led on as well as developments in the Cayman cap- “We appreciate his dedication to the TDCI and look captive operations across the US while tive insurance market. ■ forward to his continued service,” he added. ■

32 www.captiveinsurancetimes.com Industry Appointments

Gary Hall has been appointed as senior vice president and chief underwriting officer at Citadel Risk’s American Millennium Insurance Company (AMIC).

AMIC, which was acquired by Citadel in October Previously, he was part of the Citadel Risk Group, the senior management team of Citadel to 2011, will be restructured into three business serving as president and CEO of Great Falls further develop AMIC’s presence in the US. divisions, a current and prospective business Insurance Company, until its renewal rights were We face many challenges in today’s envi- unit, a financial and regulatory reporting unit sold to Eastern Alliance Insurance in 2017. ronment, but with those challenges come and a run-off unit which will be responsible for opportunities. I expect to capitalise on the management of problematic and discontin- At Eastern, Hall managed the integration of those opportunities.” ued managing general agent (MGA) business Great Falls Insurance Company’s book of work- and claims. ers’ compensation business into the Eastern/Pro Tony Weller Citadel Risk Group’s CEO, added: Assurance organisation. “Gary Hall is a proven resource within the Citadel The company insures a large market share of New Risk Group and for our counterparties. This is a Jersey’s taxis and limousines and is a niche writer Prior to that, Hall served as regional vice pres- very strong strategic appointment that can only of New Jersey trucking business, specifically own- ident of CNA, where he headed up the Boston take AMIC forward after a challenging year.” er-operator and small fleet motor carriers. and Hartford, Connecticut offices. “The prospective business has been operating Based in the firm’s New Jersey office, Hall will lead Commenting on his appointment, Hall said: “I well since 2017 and Hall has been asked to con- the current and prospective business unit. am pleased to have the opportunity to rejoin tinue and improve that process.” ■

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