The rise of technology is driving captive growth, as trickier coverages are required to cover new risks, according to speakers at the Captive Insurance Companies Association (CICA) International Conference.
Michael Serricchio, senior vice president in the captive advisory group at Marsh, noted that non-traditional coverages, such as employee benefits, supply chain, cyber, political risk and medical stop-loss, have increasingly been put into captives over the last few years due to advances in technology.
Technology-reliant industries, such as financial services and media, are also among the biggest users of captives, with the former writing up to $19 billion in premiums and the latter $4.9 billion.
Another panellist, Karl Pedersen, senior advisory specialist at Marsh, pointed to cyber as the most inevitable risk to arise from technology advances, with hacks becoming more of a question of when than if.
Many types of assets exist within organisations, including intellectual property and data, that are vulnerable to cyber attacks, according to Pedersen. Breaches should be dealt with in three assessment phases, covering risk/loss, damages and coverages.
The panel noted that coverage of cyber policies has started to broaden, with lines including terrorism and first-party property damage.
When asked if commercial insurance or captive insurance was better for cyber coverage, Pedersen said that it depends on the needs of the business, but captives might be able to do what commercial insurers cannot.