Better together than apart


What were your reasons for acquiring Cedar Management and Consulting?

Mike Palmer: Our main reason was completeness. As a group, Citadel Risk has operations in the US, Bermuda and the UK, including a cell business, two insurance companies and a reinsurer. What we were missing was a captive manager. We have worked in the captive market, generally providing stop-loss or reinsurance opportunities and legacy management for captives, but we have always had to outsource captive management.

This is how we got to know Cedar Management and Consulting. Cedar has been our captive manager for many years, so we know all of the individuals in the consultancy and management businesses. As a result, the acquisition was relatively easy and we now have that last arrow in our quiver, enabling us to offer captive setup, management, consultancy, reinsurance, run-off, novations and more. Captives can now come to Citadel from beginning to end.

Why are Citadel and Cedar better together than apart?

Dennis Silvia: When you consider the services that are necessary to bring a captive to market, you’re talking about a very mixed bag. A captive requires all sorts of capabilities—management, reinsurance, fronting, cells, the list goes on—so finding a specialised expert provider for each of those is going to be very inefficient. Combining the services of Citadel and Cedar, we are able to integrate the entire process.

We can consult on areas such as feasibility and, once the decision to launch a captive is made, provide every specialised service the client needs to bring it to fruition. It’s exciting because now we’re not dependent on outside providers to make a captive happen.

We can create them with the expertise we have within our organisation. It’s a very complementary acquisition.

Palmer: Citadel has been expanding over the last two years in both insurance and reinsurance fronting. Having Cedar Management as part of the team makes that a faster and more efficient process.

On top of that, Cedar Consulting gives us an additional layer of expertise that we didn’t have before. For example, we have a client that has some problems with its existing captive structure. Cedar Consulting is now able to offer some very real and new solutions to those difficulties. That is something that we couldn’t do before.

What’s next for Citadel and Cedar following the finalised acquisition?

Silvia: The acquisition allows Cedar the opportunity to grow its client base as a captive manager. I don’t think any of us are expecting a dramatic boom in business but I think we will see genuine organic growth.

Palmer: Expansion is a possibility. For example, we have spent a lot of time in the last two or three years working in Latin America to develop relationships with brokers and agencies to create some Latin American captives. Citadel Re is licensed as an admitted reinsurance company in many of those countries, which means there is the opportunity for growth. That’s quite exciting.

Do you see Citadel expanding its presence to other domiciles?

Palmer: We are very much Bermuda-centric, but we do see our next segregated cell capabilities being both onshore and offshore. Cedar has ability to help set that up. We are looking at a feasibility study at the moment.

Silvia: We have looked at several domiciles, but I think we are homing in on Tennessee. That location makes the most sense for us to establish a segregated cell captive because the state allows incorporated cells.

This means that we can offer the cell structure and those cells can each have their own corporate identity.

This expansion could open the door to providing services to micro, small- and medium-sized captives, but also has flexibility to offer any kind of captive structure. Tennessee seems to be very interested in working with us.
Features
The latest features from Captive Insurance Times
What should a captive look for when hiring a firm to manage its portfolio? Stephen Nedwicki of Comerica Bank takes a look
Martin Membery and Andrew Holland of Sidley Austin discuss the signing of the EU-US bilateral covered agreement and who will potentially benefit from it
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Michael Zuckerman of Temple University Fox School of Business makes the case for a captive insurance company independent board director
This year’s Bermuda Captive Conference highlighted the importance of the captive industry to the island, and the need to stay ahead of the curve in terms of regulation and innovation in order to maintain its global status
Brady Young, Stuart King and Andrew Berry tell Becky Butcher about the decision to expand into Europe with a new operation in Dublin
Unscrupulous micro captive managers and their motley crews might have walked their last plank following the ruling in the good ship Avrahami
More than 200 delegates gathered in Charlotte, North Carolina, to attend the state’s three-day annual captive insurance conference. Becky Butcher reports
John Dies and Steve Miller of alliantgroup analyse the Avrahami tax court case decision, and warn captives to take a look at their own programmes
Domicile profiles
The latest domicile profiles from Captive Insurance Times
Although the Isle of Man is currently focusing on updating its regulatory framework, Solvency II, Brexit and the Asian market all hold big opportunities for the island
Debbie Walker of the North Carolina Department of Insurance tells Becky Butcher why the state is among 2017’s standout performers
Asset Servicing Times

Visit our sister site
for all the latest asset servicing news and analysis

assetservicingtimes.com
Experts convene to talk to Becky Butcher about the stability that Guernsey represents in a challenging financial and political environment
In an era of increasing uncertainty, Tamatoa Jonassen suggests that the Cook Islands can be a bridge to financial security in a captive
With a dedicated captive plan in place, the Lone Star State is on the rise, says Josh Magden of the Texas Captive Insurance Association
After 36 years of captive business, Vermont boasts a culture of legislative change, and still has a few tricks up its sleeve. Dan Towle and David Provost explain
After a successful 2016 and the licensing of its first securitisation cell company, Malta insurance industry professionals are looking ahead to 2017
Missouri’s captive programme is approaching a decade in operation. John Talley explains how the state has made it to this milestone
Interviews
The latest interviews from Captive Insurance Times