Issues & Answers Special Advertising Section:
August 2021

Issues & Answers: Captive Resources

Mark Benz, Head of AIG Captive Solutions, said the group captive product may help multiple middle-market companies to share risk. “This may help them to share in the rewards of controlling the risk as a group,” he said. Following are excerpts of an interview.

Mark Benz
Head of Captive Solutions
AIG

“Whether you are looking to form a new captive or optimize your existing captive program, our experts can provide you with in-depth professional knowledge and guidance.”

At a Glance

Provides a complete range of captive services
Ability to set up and manage a captive in most of the major domiciles
A convenient and secure online portal where captive clients can easily post and share documents

What’s driving the growth in middle-market captives?

Well-performing companies often look to the alternative risk market for a better and more economical solution. We’re also seeing coverages such as construction and transportation look for a more tailored insurance solution that may better suit their needs. We are seeing increased growth in the middle market related to their use of group captives.

What should a company look for in a captive manager?

There are a number of qualities and attributes to consider when selecting a captive manager. A company may first want to review the domiciles where the manager can operate and how long they’ve been in the industry. Flexibility is also important. The captive product is very specialized and is not the same for every insured. It can also be beneficial if a captive manager has a broad network of partners that can help support the captive relationship with strong capabilities in claims, auditing and actuarial.

Are you seeing competition heat up between the domiciles, and if so what’s driving that?

Recently, we have seen many domiciles, including several different U.S. states get involved in the captive market, in addition to the big three captive domiciles that have been around for years, Vermont, Grand Cayman and Bermuda. This new activity has contributed to increased growth in the captive market year after year. States such as Hawaii, North Carolina, South Carolina, and Tennessee are breaking into the market and fast becoming popular domiciles. This question ultimately goes back to the captive manager, who should help a company select the domicile that best fits the company’s needs.

How does AIG Captive Solutions address the needs of clients in this evolving space?

AIG created Captive Solutions in 2020 to bring together a collection of our different captive products and services. Right now in Captive Solutions, we offer a fronting structure, which is a solution designed for a national account product utilizing a single-parent captive. Then, we have a group captive product, which brings different insureds together in one captive to potentially mitigate overall underwriting risk. Lastly, we have our captive management services teams, which help set up and manage captives in several domiciles, and also offer and administer protected/segregated cell “rent-a-captive” facilities in Vermont and Bermuda.