From: IRMI/Captive Insurance Company Reports (CICR)
Reprinted with permission.
All the current trends point towards a soft insurance market.
Premiums are stabilizing or falling, terms of coverage are becoming broader, capacity is increasing, higher liability limits are becoming available, access is easier to excess liability layers, and competition among insurers is intensifying.
But from a captive insurance company’s perspective, how do you identify when a soft market cycle is approaching and get ahead of the curve to mitigate the potential risks and capitalize on the opportunities it may present?
Insurers moving back into or expanding in areas of the market where they had previously withdrawn or limited their cover in is a clear indicator that a soft market is coming, according to Amy Evans, executive vice president, liability claims division at Intercare Insurance Services. Having ongoing discussions with insurer partners can help to detect these shifts, she said.
Ms. Evans said that the soft market can have a profound effect on captives’ claims management strategies and practices. Some captive owners may decide to move away from their captive when low premiums driven by the soft market become enticing and maintaining engagement with those who are still involved in claims and lawsuits can be a challenge, she said.
