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13 September 2017
Hamilton
Reporter Becky Butcher

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BCC: LatAm captives continue to show ‘steady growth’

The Latin American captive market continues to show steady growth in captive creation, according to a panel at the 13th annual Bermuda Captive Conference.

Discussions focused on the current growth in the region and revealed that, over the last three years, the Latin America region has seen an average of 10 to 12 percent growth.

The leading industries creating business in the captive market include manufacturing, energy, financial institutions, and food and beverages.

The panel explained that drivers for captive insurance in the Latin America market include sophistication of risk management, growth of multinationals, more efficient access to reinsurance, new sources of revenue, and writing unrelated risk as an additional line of business.

The main countries doing captive business in Latin America are Columbia, accounting for 40 percent of the business, Mexico with 30 percent, and Chile and Peru accounting for 10 percent apiece. The other 10 percent of business is conducted in countries such as Guatemala, Argentina and Ecuador.

The panel also revealed that Bermuda remains the top domicile for Latin American captives, although other domiciles such as Barbados and the Cayman Islands are also used.

The reason Bermuda is a popular choice is down to its tax information exchange agreements, which allow for more transparency and improve the reputation of the domicile, according to the panel.

Although Latin America has seen growth, the region still faces challenges in the market such as fronting fees, local currency devaluation and education on the captive concept.

The panellists in the session were: Alejandro Santos, leader of analytics and captives at Marsh Global Analytics and Captive Solutions, Giuliana Solari, senior manager at PwC, Javier Namihira, senior associate at Baker & McKenzie, Esperanza Mead, principal at Actuarial Factor and Luis Portillo, underwriter of JLT Insurance Management.

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