The event, held in Luxembourg on November 9 and 10, has been one of the most important of the year. Around 200 Captive Owners met at the European Convention Center with the aim of building a better and more sustainable future.
The 2022 edition has revealed the excellent health enjoyed by captive companies that have not only established themselves in these uncertain times, but have also proven to be more necessary than ever. The industry, and the world at large, faces multiple challenges, including: inflation, post-pandemic effects, cyber risk, supply chain disruption, war in Ukraine and managing employee benefit programmes in the new normal.
Against an uncertain backdrop, having an insurance captive in the corporation is more attractive than ever. While a decade ago many doubted its usefulness and even questioned its future, its commercial viability is now well established. Not only are existing captive companies becoming more and more established, but at the European Captive Forum 2022 a number of risk and finance managers from large companies were present to gather information on how to set up a captive whether in hard markets (low risk purchase offerings and rising premiums) like today’s or in soft markets, captives have proven to be the best tool for companies to have as much control as possible over costs and services,both in the area of employee benefits and beyond.
During the pandemic, aspects such as digital health and telemedicine became very important, and today employees take these services for granted and are not willing to give them up. This is another reason, in addition to those mentioned above, why costs are rising. Given this situation, the captives have strengthened their role as a fundamental element to control both services and expenses.
Another relevant issue that the experts discussed was the explosion of cases related to mental health derived largely due to the confinements, whose benefits have increased by more than 100%. Adequate mental health coverage is a win-win situation for all parties. Employees gain in quality of life and companies improve their results thanks to greater productivity.
The speakers emphasized the need to overcome old myths such as the belief that captives are opaque entities established in tax havens with the sole objective of evading taxes. Experience shows that captives are effective risk management instruments and it only takes a few years to amortize the cost of setting them up.
In addition to mental health, another concept was discussed, financial health. More and more companies are getting involved in showing their employees strategies that enable them to manage money more effectively. Once the mental and financial health of the employee has been guaranteed, they will be able to perform at their best at work, which will also benefit the employer.
José María Escobar, founder and partner of Delonia, moderated the session entilted “Employee benefits and captives – Lessons from uncertain times.” The talk was attended by Mattieu Rouot, CEO of MAXIS GNB and Rogier Bouwman, Global Pensions and Benefits Manager of Heineken. The panelists emphasized the need to use strategies based on data quality with the aim of improving the physical, mental, social and economic health of employees.
The European Captive Forum is a biennial event but due to pandemic-related cancellations it was held in 2021 and 2022. After the positive expectation generated this year, the decision has been taken to hold an event in 2023. This will mean that, due to the exceptional circumstances resulting from the new normality, the European Captive Forum will be held for three consecutive years, which will only benefit the captive sector.
These are some of the ideas that emerged from the European Captive Forum 2022:
- Captives are increasingly necessary and many new companies have discovered the benefits they bring.
- The industry must better explain, inside and outside the corporation, the essence of captives to overcome old myths and prejudices.
- The current uncertainty reinforces more than ever the need for captives to have control over costs and services.
- Now more than ever, employee benefits aim to cover physical, mental, social and economic health.
- The health of the employee not only results in a better quality of life for the employee, but also in an improvement for the company, which benefits from higher performance.
- The post-covid era has seen a considerable increase in the need for mental health support.
- Teleworking, telemedicine and digital access to health care are shaping a new horizon to which companies must adapt.