Increasing risks from climate change, geopolitics and AI mean that captive insurance is fast becoming a mainstream way to manage risk, attendees heard at the Airmic Guernsey Conference.
Titled: Leading the way in international risk financing, the conference saw a sell-out crowd with nearly 100 delegates from the UK joining local insurance professionals to learn more about captive insurance through the lenses of climate and cyber risk, AI and geopolitics.
One of the many benefits of captives is to give businesses greater control over risks and how they are financed, providing better long-term risk financing strategies in both hard and soft markets.
In her opening address, Airmic CEO Julia Graham said:
“The protection gap is being stretched by increasingly complex and connected risks. So that's the context that we deal with and demonstrates not only how important captive insurance is here, but also that Guernsey is about more than captives as a recognised international business and insurance centre.
Speaking about Guernsey’s insurance sector, she added: “Guernsey does and always will offer great solutions, designed, delivered and governed by knowledgeable and experienced talent, because that's a lot of what this is all about. The reputation of Guernsey as a place to do business is trusted and respected globally and I see no change in that happening.”
The conference’s plenary session, Captives in the Mainstream, moderated by Julia Graham and featuring Caroline Bradley, Co-Director of Authorisations and Innovation at the Guernsey Financial Services Commission, John Rowson, Managing Director at Howden, Paul Sykes, Managing Director Aon Insurance Managers (Guernsey) Limited and Chairman of Guernsey Finance, and Caroline Wagstaff, CEO of The London Market Group, discussed the wider context, pointing to a landscape of unparalleled volatility and technological change that is inspiring innovation in captives.
Discussion also touched upon Guernsey’s long recognised expertise in captives and jurisdictions like the UK, which are poised to launch their own captive regime.
Speakers agreed that captives represent a growing opportunity for both the UK and Guernsey. ‘Guernsey has always worked very closely with the UK,’ noted Paul, pointing to evidence of ongoing collaboration. Caroline Wagstaff added that regulators should consider the wider landscape: “It’s not just about rules, it’s about industry, culture and working with industry flexibly.” She added, “We know what good looks like, we see it in Guernsey.”
The morning consisted of three breakout sessions examining climate risk, AI and captive case studies.
The session led by Torolf Hamm, Senior Director, physical risks, climate practice at WTW, examined climate risk and the importance of identifying and mitigating various climate-related scenarios in order to ensure business continuity, answer investor demands and provide appropriate risk cover.
Torolf added that regulation is the one of the biggest drivers for action on climate risk management and financing. With increasing climate volatility, understanding how to manage climate risk and financing will be of increasing importance to businesses and their captives.
The demand for captives could grow as more businesses face greater insurance gaps identified under different climate scenarios.
Another session examined how AI is transforming the workplace and reshaping key aspects of risk management.
PwC’s Timothy Chapman and Callum McCutcheon highlighted that crucially, 42% of CEOs believe their business will not be viable in 10 years without reinvention, emphasising the urgency of embracing technological change. As the speakers noted, the challenge is to balance opportunity with responsibility: effective risk management must ensure AI is trusted so that organisations can achieve the benefits they want.
A third breakout session focused on how captives are increasingly being used to solve complex problems in a fast-changing insurance market. Moderated by Paul Eaton, Chief Executive Officer of Artex EMEA, the discussion examined how captives can provide tailored solutions where traditional insurance markets may retreat or struggle to offer competitive cover.
Further breakout sessions during the afternoon focused on geopolitical risks, employee benefits and how to bring them into your captive and cyber risks.
A breakout session on geopolitics and special risks highlighted rising instability with unintended escalation identified as the greatest concern. Speaker Rob Harford, Head of Security Response at Convex Insurance, noted that while businesses cannot control geopolitics, they must prepare for its consequences – from migration and socio-economic pressures to heightened political instability – through effective risk management and crisis response.
The realities of experiencing a cyber incident in today’s increasingly complex threat landscape was discussed by Mike Matthews, Artex Risk Solutions, who said innovative risk transfer solutions could determine whether an organisation recovered in weeks or faced months of disruption.
He discussed strategies to leverage what is available in the market and identify areas of shortfall before building a hybrid solution - using your captive to build resilience and fund some of those risk gaps.
