The current hard market offers risk managers a great opportunity to show internal stakeholders the value that a captive can bring and provide them with a greater understanding of how the captive works, according to Marine Charbonnier, global programmes and captives regional director (Europe) at AXA XL.
Speaking to Captive Insurance Times, Charbonnier said she expects the current hard market to continue into 2020, which “we anticipate will make captives even more relevant”.
She added: “If the hard market trend continues, we would expect captives to look at increasing their retention and adding new lines of business to achieve greater diversification.”
Looking ahead to 2020, Charbonnier suggested that going forward there will be more interest in the use of captives, including for emerging risks that are not typically insured.
Europe is already a very mature market with a lot of captives, however, she noted that there could be a spike of new formations.
Charbonnier commented: “Risk managers themselves will need to be prepared to explain, justify and anticipate scenarios with larger claims because of increased risk taking in the captive risk.”
She added: “I also expect that risk managers will look to work with more innovative and open minded insurers, who listen to the needs of their client and can offer a wide range of solutions.”
You can read the full interview in the latest issue of Captive Insurance Times.