A.M.BestTV: ‘First Monday’: Rated U.S. Captives Show Some Stress in 2014

OLDWICK, N.J.--()--In this first of five “First Monday” episodes, A.M. Best Assistant Vice President Steven Chirico said that despite U.S. captive insurers continuing to outperform the commercial insurance sector, industry results are showing some decay. Click on http://www.ambest.com/v.asp?v=fmcaptives815 to view the video program.

The remaining “First Monday” episodes will focus on how U.S. homeowners insurers are harnessing advanced predictive models; how the Middle East is ripe for mergers and acquisitions; how insurers have increased their overall risks and reduced their liquidity in investments and how fluctuating oil prices are hampering Nigeria’s insurance market. “First Monday” is A.M. Best’s monthly program featuring commentary by the company's leading analysts.

Captives make up about 20%-35% of the commercial market, which includes onshore and offshore companies, with most of them being in the Western Hemisphere as oppose to Asia and Europe.

“For rated and non-rated captives, 2014 was not as good a year as 2013; however, captives are still outperforming the commercial market,” said Chirico. “Group captives are stumbling a little with decaying performances, but single parent captives and risk retention groups have had significant increases. From an operating performance perspective, loss and loss adjustment expense ratios for captives, as a whole in 2014 – 69.4%, compared to 57.3% in 2013, and combined ratios before policyholder dividends were 83.6% compared to 71.6%, respectively.”

Chirico also said that the continuing soft global market, particularly the soft reinsurance rates, speaks to what is happening in the deterioration of the operating performances of group captives.

On Tuesday, August 4, 2015, A.M. Best will have its annual webinar on “State of the Captive Insurance Market,” from 2:00 p.m. to 3:00 p.m. (EDT). Register at no charge at http://www.ambest.com/webinars/captive15.

To read the latest special report on the captive industry, titled, “Group Captives Feeling The Squeeze, Single Parent Captives Winning The Race,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=240126.

Recent episodes of A.M.BestTV include:

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  • Insurers Develop New Ways to Trigger Disaster Coverage: Brokers and insurers are borrowing from the catastrophe bonds world by developing coverage against natural perils that are triggered by measurable parameters rather than traditional claims reporting: http://www.ambest.com/v.asp?v=parametric715.
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A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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Contacts

A.M. Best
Lee McDonald, 908-439-2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com

Contacts

A.M. Best
Lee McDonald, 908-439-2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com