A Capital Question?

A Capital Question

Kate Miller, Head of Institutional Business at London & Capital and Insurance Consultant, Malcolm Cutts-Watson, discuss the options.

The Highlights

Putting an insurer’s ( captive or otherwise) funds in a bank deposit or loaning back to the shareholder may seem like a risk free option but there is a catch. This paper explores best practice for insurer boards when considering investment strategy and makes some interesting observations. Maybe the bank isn’t the safest option!

 
Extracting incremental investment return without assuming extra risk or capital charges makes sense in soft market conditions and when faced with increased operational and governance costs
  • Boards need to be able to demonstrate they have reviewed all options and come to a well-informed decision on how best to invest their assets
  • Is the loan back really risk free?
  • What is best practice for insurer boards when considering investment strategy?
  • Soft-v-Hard Insurance Market-v-Soft-v-Hard Investment Market

Read the Article

Other News & Updates

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Airmic Guide for Independent Non-Executive Directors on Captive Boards.

The AIRMIC practical guide for independent non-executive directors on captive boards is welcomed given the ongoing scrutiny of the INED role. A good introduction to the “what”, a little light on the “how”. Maybe release greater detail of what a good board and INED looks like and how to achieve this. AIRMIC and sponsor Aon are to be congratulated for raising the level of debate on governance.

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How to start a captive

This is an interesting and insightful article from the team at London & Capital as to how to extract maximum value from the investment function for a small insurer. Applicable to captives, cell vehicles and commercial (re)insurers, it offers a road map forward with key steps identified to achieve asset liability management. For insurer boards with limited investment expertise, L&C can provide assurance that investment risk (and reward) is understood, quantified and properly managed

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