The OECD BEPS (Base Erosion and Profit Shifting) strategy 2015 is currently being rolled out globally. With many corporations in a preparation phase, the impact on the captive insurance market is starting to cause concern.
Man-made disasters, NAT-CAT, Reinsurance, ILS and Collateralised Reinsurance – how does all of this fit together?
There is no denying a constantly increasing trend of man-made disasters and NAT-CAT events both in frequency and severity. This can be seen in the charts taken from Swiss Re’s SIGMA 01/2016 publication for the year end 2015.
The round table discussion hosted by Business Insurance recently at the RIMS conference in San Diego reflects the current uncertainty around the soft insurance market and if and when that may change.
One of the speakers indicated that “the insurance market had the feeling of the start of a hard market” but added that “this is not what is going on”. Some experts believe there is so much anxious capital in the market now, that not even a major catastrophic event would change the willingness to invest in the insurance market. There is a promise of profit on investments and a reasonable degree of safety for the investment.
It looks like the insurance premium cycle is now looping in the soft market phase and the next premium rate increase is not even to be seen on the horizon.
Bermuda’s enduring position as the pre-eminent domicile for captive insurance was confirmed once again at this year’s Bermuda Captive Conference. The three day conference saw a record attendance, a record number of sponsors and a record number of exhibitors. To further evidence the territory’s dominance, the conference launched the Captive Hall of Fame.
Paul Buckle, of Eurobase, discusses what effective data management can do for the captive business.