Advancing technology and new analytics tools have put businesses in a position to better understand their risks and how they finance them, including the role of captive insurance.

As technology advances, the access to sophisticated analytical techniques is becoming widespread, said Paul Bailie, head of Offshore Americas Insurance Management at Willis Towers Watson. Those techniques allow companies to make better-informed decisions about risk financing, including both risk transfer and the cost of retaining risk, he said.

“Insurance buyers can now be better positioned on a more level informational playing field with insurance carriers, hopefully making the match there more equal as a result,” Mr. Bailie said. He made his remarks earlier this year as part of a session examining “The Modernization of Insurance Risk and Financial Strategies” at the 2021 Virtual Bermuda Captive Conference.

Another speaker during the session, Sean Rider, executive vice president and head of client development, North America Risk and Analytics at Willis Towers Watson, discussed how risk financing strategies can be modernized and the role of captive insurance in that process.

Ultimately, the organization’s risk financing strategy should determine the role for the captive, according to Mr. Rider.

“The captive shouldn’t have a strategy,” he said. “The captive strategy really should be derivative of the organization’s risk financing strategy.”