Paul Owens, global CEO of captive business at Willis Towers Watson, recently stated at the 2016 European Captive Summit in Luxembourg that captive managers should understand captive exit solutions.

As the captive market has matured, over the past two years a considerable number of captives intending to cease business have sold their operations to captive exit specialists in order to properly arrange their run-off business and effect loss portfolio transfers.

Paul Owens does not regard captive exit specialists such as R&Q, DARAG and SOBC as competitors; on the contrary, he believes these institutions are vital to the healthy development of the captive industry.

He said that whenever a new client enters the captive industry, the aftermath of terminating the company's operations is always considered first. For example, a Canadian company with two captive insurers recently wanted to close its European operations and was considering exit options. Although reinsurers can also provide solutions, the run-off solutions offered by captive exit specialists are more needed by the insurance market. We cooperate with R&Q and support their business model.

In recent years, captive M&A activity has become increasingly common in many mature captive domiciles such as Bermuda, the Cayman Islands and Guernsey, with many long-established captives seeking natural run-off solutions.