Q&AwithDHL
Matthew Broomfield
Q What do you write into your captive and
what is the approximate premium?
A The approximate premium is €220m. We currently have running through the captive pretty much any line of cover that we consider a frequency risk as
opposed to a severity risk, so there are multiple lines, both on the line and non-life side that get reinsured through the captive. The largest programmes include the cargo programme, the EB
programme and casualty programmes, which includes general liability, employers’ liability and third-party auto. We also have a level of aviation running through the programmes. We have one
main captive in Bermuda and then another captive in Luxembourg that participates on the EB programme. We have other captives, brought on through acquisition, that are either dormant or in
run-off.
Q How did your captive become so big?
A The captive was really set up to provide an insurance option for all the different operating entities around the globe, looking to price insurance cover on a
break-even basis, really leaving any of the monies that are saved with the business units, so they can use it for core-business opportunities. It was also devised to ensure that we have suitable
cover in place for multiple, geographic al locations around the globe.
Q Do you use your captive as a profit centre? If so, how did this come about?
A The purpose of the captive is to maintain break- even pricing to the DHL businesses all around the globe. However, there are certain revenue-enhancing
products that we will look to run through the captive, that the business can take advantage of. We offer shippers’ interest insurance products, which is where someone can insure a package
that they are shipping somewhere in the world against all risk.
“Insurers are also becoming much more honed in to what’s happening from a compliance perspective, and really becoming much more
restrictive.”
Q What are your main captive or risk management concerns for 2012?
A I guess one of the biggest concerns we have is that the environment is becoming more complex from a compliance standpoint. You’ve got Solvency II coming
in in the very near future, and we’ve got individual countries who are becoming more regulated because of some of the issues we face within the banking crisis, so compliance is going to
continue to be a real challenge, not only for DHL, but also other companies that are operating captives around the world. Insurers are also becoming much more honed in to what’s happening
from a compliance perspective, and really becoming much more restrictive and less flexible.
Q How might your use of captives change in the next few years?
A I think we are going to end up seeing more locally written policies. Because of the compliance requirements that more and more countries are getting, we see
the situation where you do need to have a local fronting policy in place. I also think that medical case management, especially in the EB side, will need to be more aggressive in terms of how we
manage our medical costs and disability costs because we do see a spike in both medical and disability claims, especially considering the economic conditions that we’re facing , not only in
Europe but around the globe.
Leo 20/02/2012 1:34pm
I feel like tohwring up Why we never hear this kind of testimonies at church? makes me think how God sees everything Thank You.
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