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Captive use evolves to cover new risks, panel told

Bermuda Captive Conference: from left, moderator Oceana Yates, and panellists Colin Kelley, Nicolas Plianthos, and Gavin Woods (Photograph by Duncan Hall)

Captives are playing an increasing role due to the evolving nature of the reinsurance market, a panellist told attendees at the 18th Bermuda Captive Conference.

Nicolas Plianthos, senior vice-president, Marsh Management Services, said: “Because of the hardening market, the reduction in capacity, exiting on the market, and new capital coming in, captives are playing an increased role in this space by taking additional risk, by filling coverage gaps, and those are the primary reasons we see.”

Mr Plianthos was speaking on the panel “Emerging Uses of Captives in the Post-Pandemic Era”.

He was joined on the panel by Colin Kelley, managing director of Ed Broking Bermuda, and Gavin Woods, a partner at law firm Carey Olsen.

The panel was moderated by Oceana Yates, senior vice president of captives, Davies Captive Management Limited.

The panellists noted the increased use of captives post-pandemic, in areas such as directors and officers cover, cyber, crypto, cannabis, insurtech, and more.

Mr Plianthos added: “We have now got this subject of ESG starting to take a foothold at a corporate level and a captive level and that again just brings new opportunities for captives to do what they were made to do – which is to fill coverage gaps, insure the uninsurable and help in this transition risk, physical risk and liability risk.”

In answer to an audience question, he said: “When corporates are thinking about their ESG risk, they need to think also about how their captive can facilitate that.”

Mr Kelley said much was learnt from the pandemic, and enterprise risk management will become even more important going forward.

The panellists said that companies must be proactive in terms of identifying and addressing risk.

Mr Plianthos said: “Take Wimbledon as an example. It had a pandemic cover, so it was clearly very proactive when many other events did not have such a thing.”

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Published September 14, 2022 at 8:34 am (Updated September 14, 2022 at 8:34 am)

Captive use evolves to cover new risks, panel told

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