Growth in the captive insurance market will be driven by
intermediaries and brokers establishing vehicles to aggregate the
risks of their individual customers, it has been claimed by a
panellist at the Guernsey Insurance Forum.
The vehicles, sometimes referred to as producer owned
reinsurance companies (PORCs) or producer owned insurance companies
(POICs), are seen as an alternative form of capital used by
promoters to support their client's niche insurance needs.
Oliver Schofield, Executive Director at RKH Reinsurance Broking,
and a panellist at the recent Guernsey Insurance Forum, said PORCs
enable customers who, in their own right may be too small to go
down the captive or protected cell company (PCC) route, to be
grouped together into a larger programme in order to enjoy the
benefits of the captive and reinsurance markets.
"It allows smaller organisations to access those
underwriting profits, rather than seeing those profits perhaps just
disappearing into the insurance and reinsurance world," said
"It also allows those producers, those brokers, to drive
alternative solutions into their client base, rather than perhaps
some of the more esoteric alternative solutions being the domain of
the larger buyer. They suddenly become much more available to the
small and very small organisations that are buying their insurance
now. It also allows those brokers to drive risk management into the
core of each of those individual customers."
Mr Schofield made the point that while captives would continue
to be used by the 'usual entities' – those
organisations he described as being around for a long time, such as
corporate entities, affinity groups, associations and trade bodies
– it was smaller firms utilising PORCs who would drive
innovation in the sector.
Fellow panellist Mark Helyar of Bedell Cristin, a Guernsey-based
lawyer specialising in insurance, reinsurance and insurance-linked
securities, agreed. He said he was seeing a number of organisations
going down the PORC route.
"PORCs are the major area of growth in the captive sector
at the moment," said Mr Helyar.
"All of the Coca Colas of this world, the BPs and the
Shells and everybody, have got their captives already, so if you
want to get into another sector, then it needs to be in
The event, which was titled 'Future stars – where next
for the (re)insurance market?', took place in London on
Wednesday 21 September.
It was hosted by Guernsey Finance in conjunction with the
Guernsey International Insurance Association (GIIA) and attracted
an audience of more than 150.
It was moderated by ITV News presenter Alastair Stewart and
featured Carlos Wong-Fupuy, a Senior Director at A.M. Best, as the
event's keynote speaker. Sponsors were Aon, Appleby, Artex Risk
Solutions, Bedell Cristin, BWCI, EY, Ogier, Royal London Asset
Management and Willis Towers Watson.
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