Captive insurance is becoming more popular in the shipping and energy/offshore industries. Recently IY LEGAL has been assisting one of Europe’s largest vessel management companies pursue captive insurance arrangements for dry cargo vessels, as an alternative to traditional routes for insuring vessel risks.
Captive insurance companies are insurance companies specifically established to insure risks arising from a connected parent group or group of companies, or assets. Generally, captives provide owners with more control over their insurance arrangements and cheaper access to marine and other forms of insurance. Typically, a significant marine operator or contractor might establish its own insurance company to handle its own risk management. Maersk did this some years ago, for instance, and reportedly cut its insurance costs by one third.
Captives help a parent company manage a block of business. They also allow the parent company to respond quickly to changes in the commercial insurance market and to identify the most efficient way to finance an identified risk. This could mean lower coverage costs compared to conventional marine insurance markets. Captive are also ideal vehicles to obtain coverage for risks that are otherwise costly, or hard to insure, in the commercial insurance markets. Captives also enable direct access to reinsurance markets, which can further reduce overall premiums.
Choice of domicile for a captive is important. As well as the ever popular jurisdictions such as Bermuda, BVI, Cayman Islands, Isle of man, Jersey etc, there are a surprising number of jurisdictions, including in the USA, that have legal and regulatory infrastructure suitable for captives.
As marine insurance costs rise and it becomes ever harder to place certain risks, we expect more of the larger owners and operators to move towards Captive insurance models.
If you would like to know more about Captive Insurance in the shipping or energy/offshore sectors please contact Andrew Iyer at: [email protected].
For more information about IY LEGAL and the legal services we can provide, please visit www.iylegal.com or call us on +44 (0)207 1007714.
Shipping & Trade Firm of the Year in England 2020
Global Law Experts Annual Awards'Leading Arbitration Specialist UK' 2022
AI Global Excellence AwardsWinner of the International Law Office 'Client Choice Award for Energy & Natural Resources UK'
While Andrew Iyer was practising as a solicitorEnergy & Natural Resources Law Expert of the Year in England 2020
Leaders in Law Global Awards“[Iyer] has the experience to instantly recognise the problems being encountered and the professional expertise to always provide sound, concise and, most importantly, clear legal advice”
From the 'International Law Office, Client Choice Guide' while Andew Iyer was practising as a solicitor“Sharp, to the point and efficient. [Iyer] responds with electrifying speed and is always contactable”
From 'The Legal 500' while Andew Iyer was practising as a solicitor'Energy & Natural Resources Firm of the Year in England' 2023
Corporate Intl Magazine Global Awards'Shipping & Trade Firm of the Year in England' 2023
Corporate Intl Magazine Global Awards“[Iyer is] one of the most experienced energy lawyers that I have come across. His energy practice has a unique offshore flavour which suits our requirements”
From the 'International Law Office, Client Choice Guide' while Andrew Iyer was practising as a solicitor“[Iyer] is very cost effective, efficient and proactive - he takes the initiative in speeding up recalcitrant opponent lawyers to the negotiating table”
From the 'International Law Office, Client Choice Guide' while Andew Iyer was practising as a solicitor“[Iyer is] an extraordinarily fine lawyer with the full portfolio of skills, from negotiating contracts to claims, disputes and arbitrations - he’s the whole package!”
From 'Chambers Guide to the Legal Profession' while Andrew Iyer was practising as a solicitor“Iyer has a deep understanding of international markets and an impressive track record in arbitration and commercial disputes”
From 'Chambers Guide to the Legal Profession' while Andrew Iyer was practising as a solicitor'Arbitration Advisers of the Year' 2021
Global Business Magazine
“an extraordinarily fine lawyer with the full portfolio of skills, from negotiating contracts to claims, disputes and arbitrations - he’s the whole package!”
From 'Chambers Guide to the Legal Profession' while Andrew Iyer was practising as a solicitor“Andrew Iyer continues to glean high praise from clients”
From 'The Legal 500' while Andrew Iyer was practising as a solicitor
