The changes in the insurance markets over the last 100 years have been transformative and at times drastic. In the last decade alone, the global political and financial sector volatility have gyrated wildly, as if black swans and gray rhinos are common occurrences. These are challenging times for business owners, who are unable to spread their non-traditional emerging new risks and hedge against its unintended consequences.
Digital technologies are disrupting business models with a perceptible shift from ownership of tangible to intangible assets. Emerging new risks like cybercrimes have put traditional insurance companies on a back foot. More often than not, the lack of claim experience has made conservative insurance companies reluctant or unwilling to take on such risks. Risk managers are troubled by exposure to any uninsurable risks.
The changes in the insurance markets over the last 100 years have been transformative and at times drastic. In the last decade alone, the global political and financial sector volatility have gyrated wildly, as if black swans and gray rhinos are common occurrences. These are challenging times for business owners, who are unable to spread their non-traditional emerging new risks and hedge against its unintended consequences.
Digital technologies are disrupting business models with a perceptible shift from ownership of tangible to intangible assets. Emerging new risks like cybercrimes have put traditional insurance companies on a back foot. More often than not, the lack of claim experience has made conservative insurance companies reluctant or unwilling to take on such risks. Risk managers are troubled by exposure to any uninsurable risks.
Why Captive Risk Management
Despite the pace of change, there is one constant: the growth of captives continues unabated. Their thriving steady growth is an affirmation of their ability to provide real value to organisations that employed it to manage their risks.
Captives are important risk management tools of Fortune 500 and Financial TimesStock Exchange (FTSE) 100 companies. Organizations of all sizes, industries, and geographic location can benefit from using captive risk management.
Owning a captive is a good strategy in an evolving global market when the pace of change can pose significant risks to an organisation overnight.
In recent years, there has been a deluge of formation of captives in the U.S. and European markets with noticeable increase in nontraditional lines of coverage. Established Re-Insurance & Captive markets like Labuan are making important contributions in transforming the industry.