Even though alternative market insurance mechanisms came into prominence at the height of the hard market way back in the 1980s, today's softening market is a perfect time to start up program-business captives, experts told managing general agents here–but some MGAs remain skeptical.

Jeffrey Packard, a captive manager for PMA Insurance Group in Blue Bell, Pa., said more and more MGAs are looking to set up captives for their successful programs this year. "I'm starting to see it now. They're taking advantage of cheap reinsurance capacity" needed to set up the captives, he told National Underwriter.

Mr. Packard shared his observations after teaching a course at AAMGA University Day–the first day of the 81st annual conference of the American Association of Managing General Agents. After reviewing the history of captives and formation basics, he and other experts said a soft reinsurance market is a key factor priming the pump of MGA program captive opportunities.

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