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More companies are looking at using their captives to write non-traditional risks, according to Judah Dobrinsky, director of risk finance at XN Captive.

XN Captive is a “one-stop-shop” for captive services including captive management, programme structuring, actuarial, legal counsel, tax and audit functions, and accounting. 

“Where we really shine is as a strategic partnership,” Dobrinsky said. “We’re not just focused on the traditional aspects of captive management – like regulatory compliance, accounting, and formation – but we’re there from the very beginning.

“Whether it’s working with the insured on first-party risk or helping to structure a programme that takes on third-party risk within a captive, we’re involved in every step.”

Dobrinsky said property owners are increasingly using captives to insure non-traditional risks such as tenant legal liability packages and protection programmes.

“These are more ancillary insurance risks that provide additional revenue streams for business owners,” he said.

“We’re also seeing an increase in third-party risk, while MGAs are taking on more risk within captives, and other similar models are emerging.”

Dobrinsky noted that despite property’s reputation as a popular line for captives, historically, it was not so common.

“People tend to think of workers’ compensation and liability as the primary lines for captives because they are generally more predictable and have the benefits of tail,” he said.

Dobrinsky said that over the past four or five years, property has gained traction within the captive market, despite the challenges of placing property into a captive.  

“That said, I’m not sure how resilient this trend will be from a market perspective.”

Dobrinksy said that as we are starting to see a deceleration in rate increases, it’s unclear whether property will continue to be as popular if the market softens.

“The appeal of captives for property insurance has been partly driven by high rates, but if the commercial market stabilises or softens, companies might reassess whether property remains a strategic line for their captives,” he added.

At the start of October, Captive Intelligence published a Long-Read highlighting that although there are signs that property pricing is softening, the line is still one of the main drivers behind growing captive utilisation around the world.

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