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Joe Taussig Benedicte Gravrand, Opalesque Geneva:

Asset managers who rely on commercial insurance to manage business risks face deductibles, exclusions and limitations for which they must bear the risk. And they can’t rely on insurers for uninsurable risks, such as key personnel, business interruption, fraud, and some cyber risks.

Establishing a captive insurance company is a more effective way to address and manage these risks, according to reinsurance expert Joe Taussig. Furthermore, captive insurance companies offer the additional benefit of tax planning opportunities.

A captive is an insurance company created and wholly owned by one or more non-insurance companies to insure the risks of its owner (or owners). Captives are essentially a form of self-insurance whereby the insurer is owned wholly by the insured. 75% of the world’s Fortune 500 companies are parent owners of captive insurance companies. More than 5000 captives have been established worldwide, with a total of captive premium income exceeding $14bn.

Looking beyond managing assets, there are compelling reasons for asset managers to form their own captive insurance companies, Taussig says in a O......................

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