Podcast Examines How Captive Insurers Use Reinsurance and Risk Pooling

In our latest podcast episode, two seasoned captive insurance experts, Bruce Wright and Saren Goldner from Eversheds Sutherland (US) LLP law firm, share insights surrounding the strategic use of reinsurance and risk pooling by captive insurers. With combined experience of over 55 years, both Bruce and Saren have been instrumental in shaping the landscape of captive insurance, and their insights provide valuable guidance for professionals navigating this complex domain.

Bruce and Saren delve into the intricacies of captive insurance, emphasizing the importance of understanding reinsurance structures commonly used by captives. They explain how captives can assume risk through reinsurance and explore various reinsurance arrangements that allow captives to tailor the amount of risk they assume based on their unique needs and risk appetite.

Bruce and Saren also shed light on the role of captive risk pools and discuss how risk pooling allows captives to share risks with other entities, creating a more stable and diversified risk portfolio. They also emphasize the significance of managing risks effectively within a pool, addressing issues such as circular cash flows, outsized losses, and unknown risks.

Bruce and Saren also outline key strategies for risk pools to avoid potential pitfalls and emphasize the importance of transparency, risk diversification, and sound contractual agreements for successfully navigating the captive insurance landscape.