Global warming captivated

The PCRIC offers member countries parametric insurance which is designed to payout within 10 days after a triggering event, providing those in need with valuable funds very soon after an event occurs. Something this vital for vulnerable regions when addressing the impacts of natural disasters and climate-related events. The PCRIC purchased reinsurance from four international reinsurers, with additional capital contributions from the Multi-Donor Trust Fund, which includes contributions from Germany, Japan, the U.S., and the UK, and is managed by the World Bank. Sure enough, funds from the program were transferred after seven days of the cyclone event, providing the Tongan government with appropriate financing to support disaster-relief efforts and effective service delivery to the affected areas.


Gita reached its peak intensity as a Category 4 cyclone before making landfall on Tonga on February 12, where its destructive wind strength caused wide spread damage. PCRIC chief executive David Traill said, “It is clear that the increased level of coverage provided to Pacific Island countries through the establishment and capitalization of PCRIC by our donor partners has made a positive impact on the support we are able to deliver to the Pacific Island region.”

To me, this story reinforces the growing recognition of climate change and related severe weather events to the insurance world. I believe captives can and will play a more important role as the world confronts this problem. At the upcoming VCIA Annual Conference August 7-9 there will be a terrific session called Natural Catastrophes and their Impact on Risk Management, which will feature the following experts sharing information on the potential impact of natural catastrophes on risk management:

VCIA President Posted in Annual Conference, Burlington, captive domicile, captive education, captive industry, Captive Insurance, captive insurance company, captive insurance industry, climate change, Cyclone Gita, disaster, economy, global warming, Insurance, natural disaster, PCRIC, Richard Smith, risk management, risk retention, Tonga, VCIA, VCIA Conference, Vermont, Vermont Captive, vermont captive bill, Vermont Captive Insurance Association, VT, weather | Leave a reply Weather or Not

It was recently reported that Strategic Risk Solutions Europe (SRS) has introduced a carbon emission risk program to be run in conjunction with Carbon Risk Solutions. The program will initially involve a series of workshops where sustainability directors and risk managers are invited to learn how they can identify, manage and finance the carbon emissions risks their firms face in the transition to the low carbon economy with a range of insurance-linked solutions, including the use of captives.

Stuart King, president of SRS Europe, echoed what many have said of the broader insurance industry in confronting climate change and its associated risks: “The insurance market has been rather slow to respond to carbon risk transfer solutions for multinationals. We see an opportunity to develop these programs within captives and cells, while the commercial market develops and becomes more comfortable with this emerging risk.”

VCIA continues to address and explore this issue with a number of sessions at our Annual Conference this coming August 7-9. Our session Natural Catastrophes and their Impact on Risk Management will feature experts sharing information on the potential impact of natural catastrophes on risk management from a variety of viewpoints including academic, actuarial and risk management.

Gillian Galford, an Earth Systems Scientist at the University of Vermont and lead author of the Vermont Climate Assessment; Howard Kunst, Senior Modeler and Chief Actuary, at CoreLogic; Jason Shafer, Professor of Atmospheric Sciences at Lyndon State Colleges, who focuses on the valuation of weather information within the private sector; and Brad Waldron, ‎Vice President, Risk Management at ‎Caesars Entertainment Corporation.

Registration for the VCIA Annual Conference opens May 1 st. We look forward to seeing many of you there for another excellent program! Thank you and I look forward to hearing from you. Posted in Annual Conference, Burlington, captive education, captive industry, Captive Insurance, captive insurance company, captive insurance industry, climate change, domicile, global warming, Insurance, leadership, Richard Smith, risk management, risk retention, SRS, SRS Europe, University of Vermont Medical Center, UVM Health Network, VCIA, VCIA Conference, Vermont, Vermont Captive, Vermont Captive Insurance Association, VT, weather | Leave a reply Sustainability + Risk Management = Resiliency

Considering risk and sustainability together is part and parcel of the same thing because sustainability in strategic terms is about building in resilience and efficiency into the business. “Rather than have separate silos where discussions or disaggregated thinking around what are the existing and emerging risks, that now is a coordinated effort,” Dr. Mackay says “Those things are tantamount to risk mitigation and the control of risk.”

To me what Lockheed is building in their business is resiliency – perhaps an over-used word these days, but as good a descriptor as any. With organizations facing increased risks from cyber security to climate change, captives can lead the way to help create that resiliency, especially as many captives already work across silos if they cover diverse risks such as property and employee benefits. So as captive practitioners you can get the process started – by coming to VCIA’s Annual Conference to get some good education with sessions such as Expanding Your Captive Business Plan and Optimizing Your Captive’s Risk Profile and Reinventing Your Captive for Maximum Results.

And a quick follow-up to last week’s blog: I reported about my concerns with the proposal to add a border adjustment tax (BAT) to any tax reform that Congress might attempt this summer, as it might cause additional costs to the captive insurance industry utilizing offshore reinsurers. Jim McIntyre just reported to me that the White House and congressional GOP leaders said that they are no longer looking at a border-adjustment tax as they work to get tax-reform legislation enacted this year. Good news as it eliminates one uncertainty in Washington!

VCIA President Posted in Annual Conference, captive education, captive industry, Captive Insurance, captive insurance industry, climate change, cyber security, Cyber Security and Captives, global warming, Insurance, leadership, Richard Smith, risk management, VCIA, VCIA Conference, Vermont, Vermont Captive, Vermont Captive Insurance Association, VT | Leave a reply