Captive reinsurance - EN

Speaker : Bert Bouton

Objective :

The training provides a comprehensive overview of how a captive reinsurance company in Luxembourg can enhance value and manage risk effectively.

Content :

Explores various aspects of captive reinsurance companies, with a particular focus on the Luxembourg context. It begins by defining what a captive reinsurance company is and its advantages, then looks at why Luxembourg is an attractive destination for this type of business.

It then explores the regulatory framework applicable to these entities in Luxembourg. A concrete business case is analysed, covering the stakeholders, the operating model, the eligible risks and the transformation of commercial insurance premiums into ceded reinsurance premiums. Accounting aspects, such as the income statement, balance sheet liabilities (in particular the equalisation provision) and balance sheet assets (such as inter-company reuse), are then detailed.

The course also discusses the economic capital required and financing methods, as well as future challenges relating to the erosion of the tax base and the transfer of profits, according to the Ferma association, offering a comprehensive perspective on the subject.

Points covered :

• Scope of activity of the captive reinsurance company: explain what a captive reinsurance company is and its advantages.
• Why Luxembourg? Highlights the reasons why Luxembourg is an attractive choice for this type of company.
• What is the regulatory framework? Explores the regulatory framework applicable to these entities in Luxembourg.
• A practical business case: analyses a concrete case involving stakeholders, the operating model, eligible risks, and the transformation of commercial insurance premiums into ceded reinsurance premiums.
• Accounting and financial management: details accounting aspects such as the income statement, balance sheet liabilities (the equalisation provision) and balance sheet assets (inter-company reuse).
• SCR and capital financing: discusses the economic capital required and financing methods.
• BEPS and the future according to Ferma: addresses the challenges of tax base erosion and profit shifting, as well as the outlook for the industry.