Barbados can be a bigger magnet for insurance business, especially the captives niche, which is a form of self-insurance that an increasing number of industries and companies are using to cover their risks.
This was the consensus from the global business sector and its regulator the Financial Services Commission (FSC) as BIBA, the Association for Global Business prepares to host the 2025 edition of its annual Barbados Risk & Insurance Management (BRIM) conference.
“Wherever there is risk, there is opportunity,” said BIBA executive director Carmel Haynes, when asked about the potential for Barbados to attract more captive insurance business.
She was speaking at the offices of Protexxa, Harbour Industrial Park, St Michael during the media launch of BRIM 2025.
The island is number three in the Caribbean and at position seven in the world for captives.
FSC chief executive officer Warrick Ward also shared that as of September 2024 there were 175 captive insurance companies with about $49.1 billion in assets.
These are otherwise known as class 1 insurance licensees, which are insurance companies that underwrite related party business, he explained.
This was in addition to 112 class two licensees with an estimated value of $123.8 billion in assets. These insurers underwrite related party business.
“I think there is incredible scope for growth. Captives cover a range [of sectors]. You see a lot of health companies, a lot of hospitals, etc. You see people who even have captives for workers compensation. You see people in the manufacturing sector, construction sector, et cetera, setting up captives,” Haynes noted.
“Universities set up a lot of captives, [as do] different educational institutions. So there is definitely room for growth. While we are the third largest within the Caribbean if you are at the potential outside of the Caribbean, especially in the United States, that are thousands of captives. So there is definitely room for growth here, in my opinion.”
Ward agreed, stating: “There is still a lot of room for growth. In the past, captives would have been seen as an alternative risk transfer method. So you have expensive plant, and you set up your own captive because traditional insurance is very expensive. Captive is now more or less becoming mainstream.
‘Captive makes sense’
“There are probably less than 10 000 captive insurance companies globally. Just think of all the companies around the world that could potentially look at pulling out and teasing out areas of risk that they can self-insure because everybody is looking at managing capital.”
Scott Stollymeyer, vice-president of USA Risk Group, which is a diamond sponsor of BRIM, added: “You can
see the cost of insurance going up globally, and particularly in certain types of insurance. So a captive makes a lot of sense, whereby you can filter some of that risk and take on some of that risk through your own insurance company.”
He said this was one of the reasons BRIM, which is scheduled to take place on March 27 and 28 at Wyndham Grand Barbados Sam Lord’s Castle, “is so important as the event”.
“It brings the awareness, it has us on that global stage as this is a domicile that’s well regulated [and] that is certainly a viable option,” he said.
BIBA first vice-president Joanna Austin reported that “we are already on course to exceed previous years’ conferences with already over 150 delegates, speakers and sponsors registered from 88 different companies and ten different countries”.
Haynes said that “even though we might not be seeing an immediate impact beyond the increased numbers of delegates that we are getting, we expect that this would redound to Barbados’ benefit in terms of future business and growing our captive insurance landscape and our reinsurance and other international insurance offerings as well”.
She reminded that BIBA started BRIM during the COVID-19 pandemic in 2021 “so for the first couple of years it was fully virtual, and then . . . transitioned to a hybrid conference”.
“From last year, we have seen an overwhelming urge by participants to be actually in the room and this is not only the participants from Barbados, but we’re seeing an increasing number of international participants as well,” the executive director said.
“And so this is really helping to put Barbados on the map. While we were quietly under the radar for those who were in the business who knew of our standing as a capital insurance jurisdiction, we’re seeing more service providers, and we really call those gatekeepers, wanting to participate.
So the fact that we’re having a law firm coming in from [Los Angeles], we’re having a bank coming in from New York, it means that they want to learn more about the opportunities that Barbados offers to their clients, and can then be able to refer Barbados as a solution for their clients,” she said. (SC)
The post Barbados’ captive insurance ‘can grow’ appeared first on nationnews.com.