Within a complex and ever-changing business environment, captive continues
to be a hugely popular risk financing mechanism, enabling organizations to
better manage costs and take greater control of their insurance program. Even
as insurance markets begin to soften, it is expected that the demand for
captive insurance will continue to rise as more organizations use this risk
mitigation tool to reduce volatility. However, captive insurance is complicated.
Captive mangers must make decisions about entry and exit from lines
of business and how much capacity to commit to a line. They must do all
of this with what appears to be a scarcity of data, when in reality many
do not fully utilize the data that they do have.
Continuing with the status quo and not fully utilizing this data hampers a
captive manager's ability to understand business as well as they should.
Captive insurers that excel in data management and analytics will gain a
competitive advantage by improving risk strategies, enhancing claims
processing, and accurately calculating insurance premiums.
Closing Thoughts
THE CAPTIVE INSURANCE RENAISSANCE | 13
