Captives still largely a self-insurance tool: David Gibbons, PwC Bermuda

Captive insurance structures are still largely a self-insurance tool for their sponsors, but there is a market there for captives that might look to offload risks, or books of business, towards the end of their lives, David Gibbons of PwC Bermuda told us in a recent video interview.

Our latest Artemis Live video interview is with David Gibbons, a Partner and the Captive Insurance Leader at PwC Bermuda.

Gibbons works with some of the largest captive insurance accounts in the world, delivering captive insurance solutions throughout the captive lifecycle.

He joined us to discuss the state of the captive insurance market and trends he is seeing in the space.

While the captive insurance market has some similarities with insurance-linked securities (ILS), in terms of the regulatory structures used, Gibbons said it’s still largely about efficient self-insurance.

“A lot of people still see captives mainly as self insurance, without looking to bring a third party in to back that risk,” Gibbons explained during the interview.

“Obviously, when you’re looking at self insurance, you’re looking at lines that are profitable, right? You’re looking at lines that you think you’re better than the market average. So why should you pay your premium to someone else where they they earn the investment income on it.”

However, he did note that “there is the ability, and there surely is the market there, when you look at captives that are at the end of their lifecycle, where people are looking to purchase those blocks to run them off further and extract some of that profitability.”

Meaning that, while, “Most people are still seeing captives as their own kind of self insurance and risk mitigation tool, rather than a capital play,” there can be a market and an opportunity for capital providers in taking on some of that risk once its owner has decided its time to shed it.

The full video interview with PwC Bermuda’s David Gibbons is embedded below and can also be viewed, along with previous Artemis Live video interviews, on our dedicated video page.

You can also listen in audio to all of our interviews by subscribing to the Artemis Live podcast here.

All of our Artemis Live video interviews have a focus on reinsurance, ILS and the efficiency of risk transfer and can be accessed here.

You can also listen in audio to these interviews by subscribing to the Artemis Live podcast here.

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