The most important thing about setting up new captive insurance structures is access to data, according to David Gibbons of PwC Bermuda.
Gibbons is a Partner and the Captive Insurance Leader at PwC Bermuda, working with some of the largest captive accounts in the world and delivering captive insurance solutions throughout the captive lifecycle.
Speaking with our sister publication as part of the Artemis Live series of video interviews, Gibbons discussed the current captive insurance market conditions and trends he is seeing, both in Bermuda and globally.
When asked how he views the current state of the captive insurance market, he said, “If you gave me one word, I would say active. If you gave me two words, I’d say very active.”
“I think that activity is really on two fronts. One is you’re seeing new formations and you’re seeing the speed from interest to formation move, from potentially one-to-three years, to a few months once a feasibility study is done,” he explained.
“I think the other area of activity we’re seeing is existing captives re-looking at the business they write, not only the lines, but the layers and as they negotiate pricing with reinsurers looking to see what portions of the business they may take that they have traditionally not taken.”
Moving on to discuss what it takes to successfully form new captive insurers, Gibbons said, “The most interesting thing about captives and most important thing, is access to data.
“You need to ensure that when you’re setting up a captive with a certain amount of capital, that capital is sufficient to pit your potential risks. The amount of and availability of accurate data allows you to predict what those risks are, and analyse the capital required.”
Gibbons went on to say that as the access to, availability and accuracy of data improves with better technology, he expects captive insurers will deliver “increased benefit” to their owners and sponsors.
You can watch the full video interview with PwC Bermuda’s David Gibbons below.
