Captives: From the Actual to Virtual Reality

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Virtual Captives

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Mind the gap please …… between real and virtual captives Swiss Re Corporate Solutions (SRCS) have unveiled the Virtual Captives Concept. What market need does it address? To whom are they suited? What gap does it bridge? What is the applicability of a pseudo-captive within the current market reality? Captives: the journey so far ……..

Introduction

Mind the gap please …… between real and virtual captives

Swiss Re Corporate Solutions (SRCS) have unveiled the Virtual Captives Concept. What market need does it address? To whom are they suited? What gap does it bridge?

What is the applicability of a pseudo-captive within the current market reality?

Captives: the journey so far ……..

Historical background

Addressing market inefficiencies

Arguably, earlier practices of marine insurance among merchants (preceding even Lloyds of London) underwriting each other’s marine ventures, constituted a form of mutual and/or captive insurance. However, captive insurance as we know it has its humble beginnings in the early 20th century.

With all the developments in  terms of vehicles, structures, domiciles and their regulation, the fundamental objective of captive insurance often gets lost in translation! So many, nowadays, equate captive insurance (or assess its success) on the fiscal arbitrage it is able to produce for ultimate beneficiary owners. Those long enough in the game know that taxation is a living and constantly changing beast and if allowed to form part of the basis of a captive’s strategic objectives, that strategy is, at best, myopic and, at worst, sooner or later doomed to fail.

The fundamental objective of captives was always to economically substitute or supplement conventional insurance cover or insurance capacity when this fell short of what certain larger corporations required. The first captives, such as British Petroleum, Imperial Chemical Industries, British American Tobacco and, later, the Steel Insurance Company of America were established specifically for these two reasons, i.e. cover and or capacity not otherwise being available (or economically feasible) through the conventional insurance market.

This, therefore, begs the question, “why did cover, capacity and pricing in the conventional insurance market fall short of the expectations of captive proponents?” The answer was increasingly evidenced in three factors that spurred captive development, i.e. the corporations that looked at captives as an alternative source of insurance did so because:

        Their loss history was generally better than that of the market and, as a result, they were subsidizing the losses of the market;

        They did not derive any benefits (e.g. no/low claims discounts, investment returns etc.) for presenting ‘more profitable’ risks to the insurance companies;

        Their results were better than the market’s because they had invested heavily in risk management which, regrettably, did not translate into long-term, tangible benefits for the organisation.

In the 1970s there was significant growth in the captive liability insurance market (pollution, medical malpractice etc.) and this development was, again, in response to lack of economic supply from the conventional market. And as new classes of business entered the captive arena, so did new captive jurisdictions addressing the perceived inefficiencies, not only of the conventional market but of what was now perceived as the traditional ‘captive’ centre, i.e. Bermuda. In 1976, for example, we see the growth of captive insurance in the Caymans specifically as a healthcare centre. In the 1970s we also had the development of the rent-a-captive model, making the captive technology assessable downstream from the very large and/or multi-national organisations or specialist professional classes by reducing the capital barriers to entry.

 

Not a fiscal arbitrage tool

Tax considerations should never one of the objectives of captives. However, as early as the 1950s, we see the involvement of ‘off-shore’ jurisdictions which- through fiscal arbitrage – allowed for a faster build-up of capital and reserves. With this development we also started seeing the changes in tax regulations to address a perceived drain of otherwise taxable income from mainstream economies.

It is a documented fact that discussions around taxation vis-à-vis captives are as old as the captive concept itself. It did not originate a few years ago with domestic tax base erosion and profit shifting (BEPS) or the more recent IRS crusade against micro-captives or indeed the wider on-going fiscal level playing field that some are lobbying for within Europe; a discussion that impinges upon financial services centres. Taxation runs parallel to, and can be part of the benefit of. a captive, but should not be a driver of the strategic objectives of a captive.

However, during the most recent soft conventional insurance market cycle, potential captive investors weighed the incumbent cost of risk (e.g. premiums, deductibles and excluded or capped losses) against the investment required (and the expected returns) for an alternative means of risk transfer. Under soft market conditions, tax saving played a more prevalent role in tipping the scales when investors decided in favour of captive formation.

Selling the captive concept is always more challenging during a soft conventional insurance market cycle due to the competitive offering from insurers…

Virtual

Captive Development

From Single Parent to Association Captives, Side-Cars, Rent-a-captives and PCCS & ILS|. From Closed Captives to PORCs and Open Market Companies

Some of the largest conventional insurers and reinsurers have in their DNA, capital that originally emanated from the alternative insurance markets. ACE (purchased by Chubb in 2016) and AXA XL (with AXA’s purchase of XL in 2018) come to mind as they started life as association captives.  Lines between the conventional, captive and alternative risk financing market also became blurred with captives increasingly entering the open-market arena in some shape or form.

Historically, the first captives were known as pure captives as they were single-parent captives and only insured risks of the parent. Over the following 100 years or so, Mutuals and Association Captives, RRGs, RPGs, PORCs, side-cars, rent-a-captives, ILS, PCCs, micro-captives and other vehicles flourished as each domicile endeavoured to carve out a differentiated, sustainably profitable proposition. Domiciles also continued to grow onshore in the USA and offshore centres west of the Atlantic to the Channel Islands, onshore and offshore EU, the Middle East, South East Asia and the Far East. The greatest changes in recent history in the captive arguably occurred post- early 1990s hard market when the captive industry experience another growth impetus.

 

Exit Stage Left: Soft Market Cycle

Breaking the 20-year cycle

We are exiting arguably the longest soft insurance market cycle in living memory. Premiums have been softening since before the Millennium and not even the dot.com bubble, Enron debacle or the great financial crisis OF 2006/7 managed to break the soft market cycle. Pricing did not follow any scientific logic and was held hostage by the market reality of excess and constantly growing supply. I remember, when working in the Middle East, that it was sometimes cheaper to insure a tower block for property and general third party liability than it was to purchase comprehensive motor insurance on an executive car!

However, the prevailing long-term negative interest environment, expensive natural disasters, the current economic slump and bleak, short-term economic recovery prospects have finally strengthened the arm of reinsurers, who are ultimately the puppet masters behind the primary insurers serving markets. A competitive environment dictates that companies can enter and exit markets with relative ease. Reinsurers exercised this option this by reducing or withholding capacity in markets or lines of business that do not deliver the technical returns expected by management or their investors. This translates into higher premiums and deductibles, higher client selectivity and more policy exclusions.

These harsh market conditions, with premiums increasing between 20% and over 100%, depending which on line of business, makes the captive proposition  more attractive once again.

Enter Stage Right: Virtual Captives

A prelude to captives? Not just.

The latest in the repertoire of captive solutions is the Virtual Captive concept (VCC)pioneered by Swiss Re Corporate Solutions (SRCS). Why and for whom is their proposition even more valid today? To call it ‘new’ may not be strictly speaking correct since a similar concept existed in some shape or form since the late 1980s conventional market hardening and the term ‘virtual captive’ may mean different things to different people. But, SRCS have freshened up the concept, starting from conventional underwriting and risk appetite (and some ultimate risk carrying if required) as their spring-board to a ‘capacity-building’ product.

Captives remain valid today for the same reasons they were valid when they first started, i.e. companies with a loss history that is better than that of the conventional market and that are very serious about their risk management and who are not yet invested in captives, are still subsidizing the losses of others in the market.

If they are not yet invested in captives then the time to do so is now.

Investing in captives is not only a matter of putting in the required capital. Insurance companies (even captive insurance companies) are regulated entities that operate within a supervised regime and require structured technical and governance substance.

SRCS’s VCC is not, in itself, a captive; it is the prelude to a captive. VCC is a multi-year insurance contract that allows a corporate client to ‘build’ capital on SRCS’s balance sheet. How? The premiums paid by a corporate client are ‘ring-fenced’ by SRCS and used only for administering the policies of that client. Any surplus at the end of the multi-year period less any management fees IS repatriated to the client. This means that clients with a better than market loss ratio will, at the end of the multi-year insurance period, reap a return premium which can be translated into the minimum capital required for the client to establish a captive.

If the proverbial hits the fan and claims exceed the maximum expected losses under the multi-year programme , then there are mechanisms in place to ensure insurance continuity for the client.

Before taking the plunge and establishing a captive, the multi-year period can be used not only to build up the required capital, implement a stronger risk management framework but also to build the required technical and governance substance in anticipation of establishing a captive.

The virtual captive concept can also be used by existing captives. How? If captives are considering expanding their lines of business and would not wish to initially expose their balance sheet to potential liabilities from the new line of business, they can ‘sand-box’ the risk on the balance sheet of Swiss Re Capital Solutions.

It can, likewise, be used when captives are exiting a line of business. The virtual captive can be used as a ‘run-off’ solution by using the SRCS’s balance sheet for their exit strategy in respect of any unwanted risk.

 

Conclusion? Encore!

Permeating across client, captive and conventional insurance strata

The Virtual Captive Concept is still in its infancy. Once it becomes accepted technology, the opportunities ,appear  limitless.

In meeting corporate risk financing needs, the Virtual Captive Concept permeates across client, captive and conventional insurance strata by offering a blended solution.

 

And the journey of captives continues………

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Captive Managers

- Stakeholders -

We do not seek to assume or duplicate responsibilities and activities performed by a Captive Manager. Rather, we look to bring added value to client service and/or assist the Captive Manager’s management of their own business. We bring extensive experience of running a captive management business including strengthening a value proposition, winning business, innovative thinking and developing staff.

Examples of CWC services for Captive Managers:

  • Act as a Non Executive Director of clients under management.
  • Assist in responding to RFP’s.
  • Review internal processes and procedures.
  • Facilitate internal workshops or away days to set strategy, establish plans or solve a particular problem.
  • Assist in staff training and education.
  • Assist in development and delivery of marketing and sales plans.
  • Act as challenger or ‘Devil’s Advocate’ to test strategy.
  • Undertake client and employee surveys.
  • Provide market intelligence.
  • Advise on complex or unusual issues or situations that captive managers may not have encountered before.
  • Assist in identifying, and recruitment of, suitable candidates for vacant or newly created senior positions.

Conor Jennings

Consultant

Conor Jennings FCII, FIRM, TEP is an insurance and risk management professional of many years’ experience.

He has lived and worked in Ireland, UK, Hong Kong and Singapore, Guernsey, BVI and more recently in the Cayman Islands.

During this time Conor has managed and directed captive insurance companies for clients ranging from small, family-held businesses to US Fortune 500 companies encompassing a whole host of industries.


Having, most recently, spent over a decade in the Caribbean managing mainly North and South American captive insurance clients Conor leverages his deep global knowledge and skills set to provide creative risk financing solutions to clients from all over the world.

Conor Jennings

Consultant

Conor Jennings FCII, FIRM, TEP is an insurance and risk management professional of many years’ experience.

He has lived and worked in Ireland, UK, Hong Kong and Singapore, Guernsey, BVI and more recently in the Cayman Islands

During this time Conor has managed and directed captive insurance companies for clients ranging from small, family-held businesses to US Fortune 500 companies encompassing a whole host of industries.

Having, most recently, spent over a decade in the Caribbean managing mainly North and South American captive insurance clients Conor leverages his deep global knowledge and skills set to provide creative risk financing solutions to clients from all over the world.

Niall Lucas

Consultant

Niall has spent most of his professional career in the captive insurance industry. Holds the ACII, FPC & Chartered Insurer along with various accounting, marketing & computer vocations.

Niall has spent most of his professional career in the captive insurance industry.

He started in Guernsey in 1996, where he provided underwriting support the UK Post Office captive.

During his career, Niall has advised captive stakeholders on underwriting, strategic, operational and governance matters across a broad range of industries and jurisdictions.

He has lead difficult consulting projects requiring innovative thinking, high quality communication skills and perseverance.

Niall has exceptional marketing and up to date IT knowledge with highly developed research and analytical skills. He qualified as a Chartered Insurer and Financial Planner. These attributes together with his vast captive experience allows Niall to fulfil his role as Chief Operating Officer of CWC.

Niall joined CWC in 2015 to support Malcolm in the development of the company. In 2016 he was promoted to COO and continues to support CWC as it holds its place as the global Captive Consultants of choice.

Niall Lucas

Chief Operating Officer

Niall has spent most of his professional career in the captive insurance industry. Holds the ACII, FPC & Chartered Insurer along with various accounting, marketing & computer vocations.

He started in Guernsey in 1996, where he provided underwriting support the UK Post Office captive.

During his career, Niall has advised captive stakeholders on underwriting, strategic, operational and governance matters across a broad range of industries and jurisdictions.

He has lead difficult consulting projects requiring innovative thinking, high quality communication skills and perseverance.

Niall has exceptional marketing & up to date IT knowledge with highly developed research and analytical skills.  He qualified as a Chartered Insurer and Financial Planner. These attributes together with his vast captive experience allows Niall to fulfil his role as Chief Operating Officer of CWC.

Niall joined CWC in 2015 to support Malcolm in the development of the company. In 2016 he was promoted to COO and continues to support CWC as it holds its position in the industry as the global Captive Consultants of choice.

Paul Wakefield

Consultant

Longstanding experience in on & offshore environments most recently as a Non Executive Director with a London market insurance Company. Experienced in feasibility studies, regulatory matters and the set up of insurance subsidiaries for global multi national corporations.

Paul delivers his own in-depth market knowledge of, and insight into, the captive insurance world.

Paul brings longstanding experience of working in both onshore and offshore environments, most recently as a Non Executive Director with a London market insurance company.

He is also currently a Non Executive Director of a number of Guernsey based insurance companies. He provides CWC clients with further valuable knowledge and a proven track record of strategic and operational consulting.

Paul has undertaken numerous feasibility studies and set up insurance subsidiaries for multi- national corporations across the globe.

As part of the work with captives he has overseen portfolio transfers, novations, redomiciliation of captives, Protected Cell Company formation and the design and implementation of multi-year multi-line reinsurance programmes. He also has undertaken various consultancy work on the regulatory side of insurance.

Paul is an Associate of the Chartered Insurance Institute. He is registered and approved as a Director with the UK Prudential Regulatory Authority and the Guernsey Financial Services Commission.

Paul Wakefield

Consultant

Longstanding experience in on & offshore environments most recently as a Non Executive Director with a London market insurance Company. Experienced in feasibility studies, regulatory matters and the set up of insurance subsidiaries for global multi national corporations.

Paul delivers his own in-depth market knowledge of, and insight into, the captive insurance world.

Paul brings longstanding experience of working in both onshore and offshore environments, most recently as a Non Executive Director with a London market insurance company.

He is also currently a Non Executive Director of a number of Guernsey based insurance companies. He provides CWC clients with further valuable knowledge and a proven track record of strategic and operational consulting.

Paul has undertaken numerous feasibility studies and set up insurance subsidiaries for multi- national corporations across the globe.

As part of the work with captives he has overseen portfolio transfers, novations, redomiciliation of captives, Protected Cell Company formation and the design and implementation of multi-year multi-line reinsurance programmes. He also has undertaken various consultancy work on the regulatory side of insurance.

Paul is an Associate of the Chartered Insurance Institute. He is registered and approved as a Director with the UK Prudential Regulatory Authority and the Guernsey Financial Services Commission.

Graham Powell

Consultant

Graham has spent four decades working in the insurance industry. He has a wealth of experience in all aspects of an insurer’s life cycle including feasibility, formation, management, revalidation and de-risking. In recent years Graham has specialized more on regulatory and compliance work for commercial insurers.

Based in Guernsey, Graham brings his unique skill set to CWC working centrally with the team as it responds to the diverse and ever-changing needs of its clients.

As a result of so many years at the “coal face” Graham has a unique insight into every aspect of insurance management. This wealth of experience is now channeled into helping CWC’s clients realise the full potential of their insurers.
This in-depth knowledge came into its own when CWC was commissioned to carry out a strategic review of the Guernsey insurance sector by the States of Guernsey. Graham acted as the project manager for this major piece of work.

Outside of CWC, Graham acts as an independent non-executive director on a number of Guernsey (re)insurers for groups operating in a wide range of industries. The owners of these entities range from private individuals to constituents of the FTSE 100 and Nasdaq.

Graham is a Chartered Insurance Practitioner and a Fellow of the Chartered Insurance Institute by examination. He is registered and approved as a Director with the Guernsey Financial Services Commission.

Graham Powell

Consultant

Graham has spent four decades working in the insurance industry. He has a wealth of experience in all aspects of an insurer’s life cycle including feasibility, formation, management, revalidation and de-risking. In recent years Graham has specialized more on regulatory and compliance work for commercial insurers.

Based in Guernsey, Graham brings his unique skill set to CWC working centrally with the team as it responds to the diverse and ever-changing needs of its clients.

As a result of so many years at the “coal face” Graham has a unique insight into every aspect of insurance management. This wealth of experience is now channeled into helping CWC’s clients realise the full potential of their insurers.

This in-depth knowledge came into its own when CWC was commissioned to carry out a strategic review of the Guernsey insurance sector by the States of Guernsey. Graham acted as the project manager for this major piece of work.   

Outside of CWC, Graham acts as an independent non-executive director on a number of Guernsey (re)insurers for groups operating in a wide range of industries. The owners of these entities range from private individuals to constituents of the FTSE 100 and Nasdaq.

Graham is a Chartered Insurance Practitioner and a Fellow of the Chartered Insurance Institute by examination. He is registered and approved as a Director with the Guernsey Financial Services Commission.

Ashley Paxton FCA

Project Consultant

Guernsey based chartered accountant with c30 years’ experience spent in practice.

Recently retired as partner and head of Advisory for KPMG in the Channel Islands.

Guernsey based chartered accountant with c30 years’ experience spent in practice.

Unique blend of operational and client experience split between audit and advisory latterly focused on providing transactional support across the insurance, funds, fiduciary and banking sectors as well as local government.

Led a number of high profile and innovative engagements for the States of Guernsey including:

2017 – States bond issue commissioned by the Scrutiny Management Committee
2017 – Guernsey housing market review
2016 – Strategic review of the Guernsey fiduciary industry
2015 – Financial mitigation for milk distributors
2015 – International Capital Flows (funds sector)
Various other confidential engagements

Qualifications
Fellow of the Institute of Chartered Accountants in England and Wales
BSc (Hons) Economics, University of Warwick

Ashley Paxton FCA​

Project Consultant

Guernsey based chartered accountant with c30 years’ experience spent in practice.

Recently retired as partner and head of Advisory for KPMG in the Channel Islands.

Guernsey based chartered accountant with c30 years’ experience spent in practice.

Unique blend of operational and client experience split between audit and advisory latterly focused on providing transactional support across the insurance, funds, fiduciary and banking sectors as well as local government.

Led a number of high profile and innovative engagements for the States of Guernsey including:

2017 – States bond issue commissioned by the Scrutiny Management Committee
2017 – Guernsey housing market review
2016 – Strategic review of the Guernsey fiduciary industry
2015 – Financial mitigation for milk distributors
2015 – International Capital Flows (funds sector)
Various other confidential engagements

Qualifications
Fellow of the Institute of Chartered Accountants in England and Wales
BSc (Hons) Economics, University of Warwick

Dom Wheatley

Consultant

A seasoned captive practitioner and consultant, finance industry experience with over 25 years  world class knowledge.

Exiting Chief Executive of Guernsey Finance, the promotional agency for Guernsey’s finance industry.

His role included business development and the promotion of Guernsey’s finance industry in the Island’s target markets including Europe, the US and the emerging markets, technical research to support promotional activities and liaison with industry associations and government.

Previously Chief Marketing Officer of the Willis Global Captive Practice and Managing Director of its Guernsey business. Over 25 years of finance experience in London and, for the past 19 years in Guernsey.

A member of the Institute of Directors and serve as a non-executive director on a number of local boards. A fellow of the Chartered Insurance Institute and holds an M.B.A from Warwick University.

Dom Wheatley

Consultant

A seasoned captive practitioner and consultant, finance industry experience with over 25 years  world class knowledge.

Exiting Chief Executive of Guernsey Finance, the promotional agency for Guernsey’s finance industry.

His role included business development and the promotion of Guernsey’s finance industry in the Island’s target markets including Europe, the US and the emerging markets, technical research to support promotional activities and liaison with industry associations and government.

Previously Chief Marketing Officer of the Willis Global Captive Practice and Managing Director of its Guernsey business. Over 25 years of finance experience in London and, for the past 19 years in Guernsey.

A member of the Institute of Directors and serve as a non-executive director on a number of local boards. A fellow of the Chartered Insurance Institute and holds an M.B.A from Warwick University.

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James Portelli

Consultant

A seasoned chartered insurance risk manager with 3 decades of insurance and reinsurance experience in conventional and captive sectors across Europe and the Middle East.
James has been involved in financial services, initially in banking, since 1986 and joining insurance in 1990. 
 
A chartered insurance risk manager, James is a Fellow of the Chartered Insurance Institute and a Fellow of the UK Institute of Risk Management and also holds an MSc in Risk Management from Glasgow Caledonian University. 
 
He started his insurance career with Middlesea Insurance plc (now part of the Grupo Mapfre conglomerate) in Malta later worked in London, Central Europe , the Middle East (Bahrain, UAE and Qatar) and East Africa with a career spanning commercial and industrial insurance underwriting, distribution, outward reinsurance, broking, risk management, captive management, consulting and training.
 
He is now an non-executive director on a portfolio of insurance companies in Malta operating across Europe by virtue of the EU Freedom of Services Directive, is also active in one company in an executive capacity and lectures insurance part-time at the University of Malta. 

James Portelli

Consultant

A seasoned chartered insurance risk manager with 3 decades of insurance and reinsurance experience in conventional and captive sectors across Europe and the Middle East

James has been involved in financial services, initially in banking, since 1986 and joining insurance in 1990. 
 
A chartered insurance risk manager, James is a Fellow of the Chartered Insurance Institute and a Fellow of the UK Institute of Risk Management and also holds an MSc in Risk Management from Glasgow Caledonian University. 
 
He started his insurance career with Middlesea Insurance plc (now part of the Grupo Mapfre conglomerate) in Malta later worked in London, Central Europe , the Middle East (Bahrain, UAE and Qatar) and East Africa with a career spanning commercial and industrial insurance underwriting, distribution, outward reinsurance, broking, risk management, captive management, consulting and training.
 
He is now an non-executive director on a portfolio of insurance companies in Malta operating across Europe by virtue of the EU Freedom of Services Directive, is also active in one company in an executive capacity and lectures insurance part-time at the University of Malta. 

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Captive Managers

- Stakeholders -

We do not seek to assume or duplicate responsibilities and activities performed by a Captive Manager. Rather, we look to bring added value to client service and/or assist the Captive Manager’s management of their own business. We bring extensive experience of running a captive management business including strengthening a value proposition, winning business, innovative thinking and developing staff.

Examples of CWC services for Captive Managers:

  • Act as a Non Executive Director of clients under management.
  • Assist in responding to RFP’s.
  • Review internal processes and procedures.
  • Facilitate internal workshops or away days to set strategy, establish plans or solve a particular problem.
  • Assist in staff training and education.
  • Assist in development and delivery of marketing and sales plans.
  • Act as challenger or ‘Devil’s Advocate’ to test strategy.
  • Undertake client and employee surveys.
  • Provide market intelligence.
  • Advise on complex or unusual issues or situations that captive managers may not have encountered before.
  • Assist in identifying, and recruitment of, suitable candidates for vacant or newly created senior positions.

Our CWC Products designed for Captive Managers:

  • xxxxxxxx.
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Captive Owners

- Stakeholders -

If you are considering captive insurance for the first time or need quality independent advice on change management, CWC can assist you ensuring the captive insurance vehicle is right for your organisation.

Examples of CWC services for Captive Owners:

  • Strategic review. Is your captive business plan still relevant and delivering real value?Creation of a strategic road map to optimise the captive’s effectiveness and meet key drivers.
  • Domicile review. Could your captive objectives be better achieved in another location?
  • Exit strategies. If your captive has run its course, what is the best means to exit the business?
  • Health check. Are you comfortable your captive is operating efficiently and in line with industry best practice?
  • Bespoke consulting to respond to particular issues your captive faces.

CWC Products for Captive Owners:

Captive Strategic Review

Captive Feasibility Study

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Captive Health Check

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Industry Engagement

- Employment of Talent -

To continue to offer, or to create, a compelling and competitive captive offering, domicile authorities need to understand the global captive marketplace, changing stakeholder demands and threats or opportunities for the business. It can be a challenge for these bodies to be able to access independent, insightful advice upon which to base their strategic planning and resource allocation.

Examples of CWC services for Industry Engagement:

  • Advising regulators on pragmatic implementation of regulatory change.
  • Recommend to promotional agencies how to enhance their domicile proposition and advance their strategic thinking.
  • Assist governmental bodies on the needs of the captive industry to facilitate the delivery of enabling legislation to allow the local captive business to flourish.
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Service Providers

- Stakeholders -

If you are looking to create, enhance or take to market your captive proposition we can advise you on the best way to proceed. CWC is wholly independently owned and not associated with another broking or insurance company, giving it complete independence and flexibility. This allows us to work with you to deliver to the captive market a best in class offering that benefits from our combined accumulated knowledge and wisdom.

Examples of CWC services for Service Providers:

We maintain close links with captive industry globally and so are able to guide you through market dynamics, culture & accepted practice, trends and emerging developments. Our extensive network of contacts ensures honest feedback and access to key influencers and decision makers in the domiciles.

We can contribute to your marketing and sales planning and facilitate product launches, or simply be a sounding board for your ideas.

Captive Strategic Review

- for Captive Owners-

If you are looking to create, enhance or take to market your captive proposition we can advise you on the best way to proceed. CWC is wholly independently owned and not associated with another broking or insurance company, giving it complete independence and flexibility. This allows us to work with you to deliver to the captive market a best in class offering that benefits from our combined accumulated knowledge and wisdom.

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Captive Feasibility Study

- for Captive Owners-

If you are looking to create, enhance or take to market your captive proposition we can advise you on the best way to proceed. CWC is wholly independently owned and not associated with another broking or insurance company, giving it complete independence and flexibility. This allows us to work with you to deliver to the captive market a best in class offering that benefits from our combined accumulated knowledge and wisdom.

Download the Brochure :

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Captive Health Check

- for Captive Owners-

If you are looking to create, enhance or take to market your captive proposition we can advise you on the best way to proceed. CWC is wholly independently owned and not associated with another broking or insurance company, giving it complete independence and flexibility. This allows us to work with you to deliver to the captive market a best in class offering that benefits from our combined accumulated knowledge and wisdom.

Download the Brochure :

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Insurers & Reinsurers

- Partners -

The market typically interacts with a captive in the following ways:

  • Underwriting the risk of the insured and then reinsuring all or part of the risk to the captive (“fronting”).
  • Acting as a reinsurer of the captive to accept excess risk above the captive’s risk bearing appetite. The captive may have assumed risk on a direct basis from the insured or via a fronting arrangement.


In all situations (re)insurance industry stakeholders should interact with the captive on the same terms as they would with any other market participant yet recognising the unique characteristics of the captive arrangement.

Examples of CWC services for Insurers & Reinsurers:

  • Conduct In-house workshops to ensure full understanding of the captive model, the roles and relationship of all parties in a captive arrangement and flow of funds and documentation.
  • Advise on captive participation; programme design, operational processes and procedures, collateral, and reporting requirements.
  • Inform of the needs of the captive industry in respect of fronting services and reinsurance protection.
  • Advise on developments and trends in the captive industry such as governance and regulatory changes and explain the impact on the captive and on your involvement.
  • Act as your in-house captive centre of excellence, either remotely or participate in discussions with the insured and their advisers.
  • Introduce you to key captive stakeholders and influencers.
  • Assist and participate in marketing activities.

Domicile Regulators, Governments &
Promotional Agencies

- Partners -

To continue to offer, or to create, a compelling and competitive captive offering, domicile authorities need to understand the global captive marketplace, changing stakeholder demands and threats or opportunities for the business. It can be a challenge for these bodies to be able to access independent, insightful advice upon which to base their strategic planning and resource allocation.

Examples of CWC services for Domicile Regulators & Promotional Agencies:

  • Advising regulators on pragmatic implementation of regulatory change.
  • Recommend to promotional agencies how to enhance their domicile proposition and advance their strategic thinking.
  • Assist governmental bodies on the needs of the captive industry to facilitate the delivery of enabling legislation to allow the local captive business to flourish.

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- Human Capital -

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As part of our commitment to develop the talent in the captive industry, we host various educational events. Recent examples include the 2015 UK Insurance Act and management of assets in a Solvency II world.

We also run an Advanced Captive Training programme as we have identified there is little structured educational resource in the industry beyond introductory courses.

Our consultants are frequent speakers at industry events covering technical topics as well as offering their outlook on the current and future captive landscape.

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Examples of CWC services for our Commitment to Education:

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Career Development

- Human Capital -

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We offer an objective and confidential service to talent wishing to assess their career opportunities. We can draw upon many years of experience and offer detached advice on your career path and learning development
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Examples of CWC services for our Commitment to Career Development:

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International Recruitment

- Human Capital -

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We offer an objective and confidential service to talent wishing to assess their career opportunities. We can draw upon many years of experience and offer detached advice on your career path and learning development
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Examples of CWC services for our Commitment to Career Development:

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Board Development

- Human Capital -

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The Board, and individual Board Members, face a growing array of stakeholders’ scrutiny whilst directing a captive or SME insurer. Increasingly, they are looking to external independent counsel to ensure, and provide evidence, that they are a high performing and soundly governed caucus.

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Examples of CWC services for our Commitment to Board Development:

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Our Products:

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Tomas Welsh

Developmet Coach

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Thomas Welsh

Development Coach

Thomas

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Non-Executive Directorship

- Employment of Talent -

To continue to offer, or to create, a compelling and competitive captive offering, domicile authorities need to understand the global captive marketplace, changing stakeholder demands and threats or opportunities for the business. It can be a challenge for these bodies to be able to access independent, insightful advice upon which to base their strategic planning and resource allocation.

Examples of CWC Consultant held Non-Executive Directorships:

  • Advising regulators on pragmatic implementation of regulatory change.
  • Recommend to promotional agencies how to enhance their domicile proposition and advance their strategic thinking.
  • Assist governmental bodies on the needs of the captive industry to facilitate the delivery of enabling legislation to allow the local captive business to flourish.

Short Term Consignment

- Employment of Talent -

To continue to offer, or to create, a compelling and competitive captive offering, domicile authorities need to understand the global captive marketplace, changing stakeholder demands and threats or opportunities for the business. It can be a challenge for these bodies to be able to access independent, insightful advice upon which to base their strategic planning and resource allocation.

Examples of CWC services for Short Term Consignment:

  • Advising regulators on pragmatic implementation of regulatory change.
  • Recommend to promotional agencies how to enhance their domicile proposition and advance their strategic thinking.
  • Assist governmental bodies on the needs of the captive industry to facilitate the delivery of enabling legislation to allow the local captive business to flourish.
Malcolm_Square_shaped_white_backdrop

Malcolm Cutts-Watson

Founder & Managing Director

A seasoned captive practitioner and consultant, Malcolm has gathered vast experience over 4 decades working in different domiciles and advising companies and regulatory bodies across the world.

Malcolm Cutts-Watson has spent most of his professional career in the captive insurance industry.

He started in Bermuda in 1982, was in the vanguard of the development of Vermont captive business and then worked in Guernsey. During his career, Malcolm has advised captive stakeholders on strategic, operational and governance matters across a broad range of industries and jurisdictions . He also advises governmental and regulatory bodies on legislative and regulatory change.

He has served, and continues to serve, as a director on a variety of captive insurers and is an approved person in many captive domiciles. He qualified as an accountant in 1982.

Malcolm was a member of the Captive Review Power 50 and in 2015 received the industry’s outstanding contribution by an individual award.

In 2017 he became an inaugural inductee into the Captive Hall of Fame which recognises the most influential figures in the captive industry over the past 50 years.

He has acted as industry partner to AIRMIC’s Captive Special Interest Group. He is a regular contributor to industry debate and is a passionate advocate for the raising of standards in the captive industry.

Malcolm founded CWC in 2015 to allow organisations access to the accumulated knowledge, insight and solutions that he, and the rest of the CWC team of captive insurance experts, have gathered over their lifetimes.

Malcolm Cutts-Watson

Founder & Managing Director

Malcolm_Square_shaped_white_backdrop

A seasoned captive practitioner and consultant, Malcolm has gathered vast experience over 4 decades working in different domiciles and advising companies and regulatory bodies across the world.

Malcolm Cutts-Watson has spent most of his professional career in the captive insurance industry.

He started in Bermuda in 1982, was in the vanguard of the development of Vermont captive business and then worked in Guernsey. During his career, Malcolm has advised captive stakeholders on strategic, operational and governance matters across a broad range of industries and jurisdictions . He also advises governmental and regulatory bodies on legislative and regulatory change.

He has served, and continues to serve, as a director as a director on a variety of captive insurers and is an approved person in many captive domiciles. He qualified as an accountant in 1982.

Malcolm was a member of the Captive Review Power 50 and in 2015 received the industry’s outstanding contribution by an individual award.

In 2017 he became an inaugural inductee into the Captive Hall of Fame which recognises the most influential figures in the captive industry over the past 50 years.

He has acted as industry partner to AIRMIC’s Captive Special Interest Group. He is a regular contributor to industry debate and is a passionate advocate for the raising of standards in the captive industry.

Malcolm founded CWC in 2015 to allow organisations access to the accumulated knowledge, insight and solutions that he, and the rest of the CWC team of captive insurance experts, have gathered over their lifetimes.