Corporates must have the resilience to bear exceptional shocks, via ‘self-insurance’ or risk transfer to insurers, said Amrae
Amrae has welcomed the announcement by the French minister of the economy, Finance and Recovery, Bruno Le Maire that the government intends to set up an “advantageous tax regime” that will benefit corporates wishing to set up captive insurance entities.
In particular the commitments of insurers in favour of companies most affected by the crisis, as well as his indications on the will of the public authorities not to create compulsory pandemic insurance, and to allow companies to set up “advantageous tax treatment” provisions to use them in the event of a new pandemic.
Le Maire is in favour of “individual and optional risk management solutions that make it possible to strengthen the resilience of companies and their capacity to face large-scale crises without rigidifying their costs”.
He stated that the government had no interest in making pandemic insurance premiums compulsory in any public private partnership it develops going forward.
“Companies, whatever their size and sector, must analyse their risks and conduct an effective prevention policy, including business continuity and crisis management systems,” said Amrae in a statement.
“They must also be able to bear financially, by ‘self-insurance’ on their balance sheet or by transferring them to the insurance market, the economic losses resulting from frequent or exceptional shocks.”
Captive insurers are an important solution for future pandemics, believes Amrae. Speaking to StrategicRISK in September, Amrae president Oliver Wild said the risk association was in discussion with the French government to facilitate the creation of captives.
“There’s a significant opportunity for the government to understand why companies are setting up their captives in countries where the regulatory framework is robust, but potentially more flexible. Obviously, there are tax issues as well.”
“Captive insurance is something that AMRAE has been talking about and pushing for a while,” he added. “And with the markets hardening, the captive is a great vehicle for reducing your total cost of risk transfer.”
No comments yet