A further 36.4 percent already provide cyber cover through their captives, while a resounding 76.3 percent said it is the hottest emerging risk at the moment.
Speaking at the CICA International Conference, Peter Joy, executive vice president at Aon Insurance Managers, said of cyber risk: “There is certainly a lot of discussion, however, after only three people in the audience raised their hand when asked if they use it, there is a concern. There is a lot of conversation, but not a lot of action.”
Other popular emerging risks to receive notable mentions in the market study were supply chain at 42.5 percent and medical stop-loss at 39.1 percent.
Sean Rider, who serves as a managing director of consulting and development in Willis Towers Watson’s global captive practice, commented: “We are seeing people use medical stop-loss in captives and reinsurance on the back end because of cost.”
Ken Arguello, risk manager for claims and captive programmes at Dow Corning Corporation, went on to discuss the study’s other findings, claiming that were not surprising.
The study showed that 73.7 percent of respondents believe that a captive’s ability to plug holes in an insurance programme makes it valuable. Arguello added: “Another reason is its tax benefits.”
Some 36 percent of respondents believe that not being able to obtain useful information is the biggest barrier to optimising a captive, followed by 32.3 percent who believe communicating the value of captive to management is a barrier.
The biggest challenges faced when attempting to set up a captive are time and resource management, said 36.1 percent, and a lack of management approval and interest, according to 21.5 percent of respondents.
Arguello believes that captives managers can overcome these challenges with “more communication and involvement with and between all service providers; support and stronger representation by CICA; and by demonstrating the value of adding captive programmes”.