In a speech in 1962, President John F. Kennedy observed that the Chinese character for crisis was the combination of the brush stroke for "danger" with the brush stroke for "opportunity." While this could describe the financial world in general right now, it is a good summation of the current captive insurance environment.

Investment income is down significantly, removing one big incentive for risk managers to form new captives. And as long as the soft market continues, prices for coverage from traditional insurers may be so attractive that the decision to form a captive becomes more difficult to rationalize.

To again quote President Kennedy, however: "The time to fix the roof is when the sun is shining." In other words, those who understand the primary purposes of forming a captive understand that for several reasons, this period is among the best ever to do so.

Recommended For You

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.