Facebook logo
Facebook logo
Facebook logo
Facebook logo

Latest Headlines

Captive Insurance Times home | Increase in captive use to limit EB cost ← You are here

Latest News
Guernsey must pay attention to UK’s ILS push, says McLaughlin
27 March 2017 | St Peter Port
Guernsey should take the UK ‘seriously’ as it sets up an insurance-linked securities (ILS) regime in London, according to Stewart McLaughlin, executive director at Aon Risk Solutions Read more

Grant Thornton Cayman founding partner retires
27 March 2017 | Cayman Islands
Grant Thornton’s Terry Carson has retired, stepping down from his role as founding partner Read more

For more news visit our news section

Upcoming events
Date: 28 March 2017
Location: SHANGRI LA at THE FORT Taguig, Metro Manila
Find out more

Captives & Corporate Insurance Strategies Summit
Date: 05 - 06 June 2017
Location: Canada
Find out more

For more events visit our event section
Industry recruitment
There are currently no jobs available
For more jobs visit our recruitment section
Captive Insurance Times
View the latest issues online now

Sister publications
Securities Lending Times

Asset Servicing Times

Real Estate Investment Times

Media pack [download]
Ad specs [download]
Latest features
Can a captive $ave us from ourselves?
Feature: With a solid enterprise risk management strategy, a captive can increase in value and reputation, says Michael Zuckerman of Temple University Read more

Cook Islands
Country profile: In an era of increasing uncertainty, Tamatoa Jonassen suggests that the Cook Islands can be a bridge to financial security in a captive Read more

Ciaran Healy :: Willis Towers Watson
Interview: Although it’s typically viewed as a defensive move, BEPS could mean positive things for captives, says Ciaran Healy of Willis Towers Watson Read more

For more features visit our features section
Latest news
More news
Increase in captive use to limit EB cost
09 March 2017 | London | Reporter: Becky Butcher
Multinational pooling and captives are being increasingly used to limit the cost of insurable employee benefits globally, according to research by Willis Towers Watson.

The research showed that the rising cost of employee benefits around the world is prompting more international companies to set up multinational pooling and employee benefit captive arrangements in order to improve the performance of their insurable employee benefit plans.

It suggested that the primary objective for setting up such arrangements is usually to lower premium costs or to reduce cost increases to below market inflationary levels.

Pro-actively managed multinational pools and employee benefit captives can generate savings of over 14 percent and 25 percent, respectively, on insured benefit costs, according to the research.

It also found that some captive arrangements delivered even higher returns, because companies actively discounted their premiums up-front before reinsuring them to their captives.

Roger Beech, director of global services and solutions at Willis Towers Watson said: “The increasing costs of insurable employee benefits are hitting the radar of senior executives more regularly, with the result that there is greater urgency to understand and manage the drivers of these costs and their growth.”

He added: “The annual costs for insurable employee benefits can easily exceed $25 million for a company with 20,000 employees around the world, so the use of multinational pooling and employee benefit captives can deliver significant cost savings for many companies. As multinational companies seek out cost management opportunities, approaches to create a competitive advantage, taking a proactive and considered approach to the management of insurable benefits results in relatively easy savings.”

In 2016, in terms of location for multinational pooling performance, Sweden produced the largest savings as a percentage of total premium pooled, 41 percent, while contracts in Canada were the worst performances with average returns of 16 percent.

For employee benefits captives, variations in profitability were even wider, with Japan producing the largest returns at 55 percent, while Ireland only gaining returns of 24 percent.

Beech commented: “The findings do not mean that companies should automatically include every benefit plan in Sweden or Japan, or exclude every contract in Canada or Ireland. Rather they should conduct due diligence and consider their own objectives, claims experience, premium rates, network retention levels and other factors before adding or continuing to include any contract in their pool or captive.”

Guernsey must pay attention to UK’s ILS push, says McLaughlin
Guernsey should take the UK ‘seriously’ as it sets up an insurance-linked securities (ILS) regim Read more

Grant Thornton Cayman founding partner retires
Grant Thornton’s Terry Carson has retired, stepping down from his role as founding partner Read more

Drinker Biddle hires insurance pro in California
Dan Brown is based in the firm’s San Francisco office. He was previously a partner at Dentons wher Read more

Christina Kindstedt joins Advantage Insurance
Advantage Insurance has appointed Christina Kindstedt as senior vice president Read more

Delaware to allow captives to go dormant
Arkansas and Montana introduced legislation proposing a dormant status for captives last month Read more

Captive Insurance Times site map


Issue archive
Back issues online
Events andtraining
Upcoming events

Upcoming training

Company info
About us

Contact us

Copyright (C) 2013 Black Knight Media Ltd. All rights reserved. No reproduction without prior authorization