From: Captive International

The COVID-19 pandemic has been educational in terms of demonstrating the full risk management capabilities of captives, according to Heather McClure, chief risk officer at OU Health. Speaking in a Q&A session as part of CICA’s Building the Best digital education series, she outlined how her organisation’s captive enabled it to adapt to the new scenario.

“The pandemic has taught us a lot,” she said. “It was like a boot camp on what the captive can do.”

One of its capabilities related to reassessing premiums. “We looked at the fact that we weren’t providing elective surgeries for some time, for example, and where that affected our risk profile,” she said. “It actually lowered our risk profile in some spaces, and so we were able to adjust for that and give some much-needed rebates to policyholders during that time.”

Looking ahead, OU Health is exploring opportunities to restructure its risk management drawing on the lessons learned during the pandemic.

“We’re looking at how we can use those to springboard to new programmes, new operations for our captive, bringing in additional lines,” she said. “Obviously the hardening market is of great concern to everyone and so, working with our captive management and our brokers and other experts, we are looking at what lines, what deductibles, we can bring into our captive.”

Discussing the topic of emerging lines, Michael Zuckerman of Temple University Fox School of Business highlighted significant trends in terms of business interruption, especially related to the pandemic and cyber.