Untapped potential for captives across LatAm: SRS
Although captive insurance in Latin America is mainly used by larger corporates, there is an untapped market in the form of mid-size and small corporations that are still unaware of the benefits of having a captive, Luis Delgado (pictured), Latin America regional director at Strategic Risk Solutions (SRS), told Intelligent Insurer.
He added that this is mainly due to a lack of knowledge within their insurance and risk management departments.
“Colombia and Mexico are the two countries driving growth in the region, while Argentina, Brazil, Chile, and Peru and are producing low numbers of captive formations,” he says. “Lack of capacity from the reinsurance market and tougher conditions and exclusions are forcing companies to look at alternatives to transfer risk, or to retain it via a captive.”
The potential market in Latin America led SRS to get boots on the ground in the region, by sending Delgado, a former Bermuda executive, to Colombia to lead its business development strategies and the geographical expansion into Latin America.
Delgado joined SRS in 2020 as vice president of SRS Bermuda’s captive management operations. In his new role, he will continue to lead a team of Spanish-speaking accountants with captive insurance experience, based in Colombia.
He explains that there is a lack of independent captive managers in the region. To be the number one independent firm, SRS must be present on the ground. “Having in-person meetings provides a boost in confidence for prospective clients and makes the captive project progress in a timely manner,” adds Delgado.
SRS’s mission in the region is to expose the brand and make sure it is known across Latin America.
He adds: “Our goal is to provide companies with a new and independent option for alternative risk transfer solutions. SRS sees opportunities in line with the market, mainly in Argentina, Brazil Colombia, and Mexico.”
There are challenges: the biggest being to ensure the captive insurance concept is known and understood by corporates that are suitable for a captive solution.
“Once that education process is completed and corporates decide to proceed with the captive project, the number two challenge is finding a suitable fronting partner that makes the business plan feasible, by writing local policies for the parent company and then including the captive in the reinsurance strategy designed by the company,” he concludes.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
Already registered?
Login to your account
If you don't have a login or your access has expired, you will need to purchase a subscription to gain access to this article, including all our online content.
For more information on individual annual subscriptions for full paid access and corporate subscription options please contact us.
To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.
For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk