A Capital Question
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
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