Suzanne Sharma
Captives: Q&A with Aon’s Bill Morgan | Canadian Insurance

Captives: Q&A with Aon’s Bill Morgan

New issues and trends will be discussed at this year's Captives & Corporate Insurance Strategies Summit.

Bill Morgan, managing director at Aon Insurance Managers, moderated last year's Captives & Corporate Insurance Strategies Summit on June 1, 2011 in Toronto.

The annual Captives & Corporate Insurance Strategies Summit is around the corner. Canadian Insurance Top Broker spoke to conference chair Bill Morgan, managing director, Aon Insurance Managers, to get a preview of what delegates can expect this year.

Q. How do you plan to set the scene for the conference through your opening address?

A. I will provide some updated global statistics on captives to show what the trends are. Then I try to identify some of the current issues, including talk of hard and soft market. I’m starting to see evidence of a hard market, which usually increases interest in captives. There are also a lot of regulatory reforms going on around the world, and the newest thing this year is the Tax Information Exchange Agreement.

Q. I understand Bermuda has recently signed the Tax Information Exchange Agreement, which puts Bermuda captive managers and providers on a level playing field with other offshore domiciles, particularly Barbados. How might this affect BC-based captive managers?

A. I don’t think it should at all. In my view, BC competes for a certain type of business. Canadian companies predominantly with Canadian risks are the ones who should consider BC because there’s no tax advantage to being offshore. Meanwhile, a Canadian-owned company that has non-Canadian risks may be more attracted to Barbados, or now Bermuda. That’s the risk that attracts exempt surplus treatment.

Q. What about the advantages for Canadian companies looking to set up a captive now that Bermuda has entered the market?

A. They’ll have more choice. Previously it was concluded that Barbados offered the best deal from a tax perspective because you could reduce the tax that was otherwise payable. Canadian companies will have to look at other factors to determine which domicile they would prefer—it may come down to other business they have in that area.

Q. What key lessons have you learned about captive management since becoming conference chair in 2009?

A. The biggest lessons I’ve learned are through attending sessions with case studies. As you listen to all of these examples and how each company handles similar situations differently, it broadens your perspective so that when you run across a similar situation, you have more options to consider. Drawing upon others experiences is very useful.

Q. What can delegates expect to take away from this year’s conference?

What I’m looking forward to most is the risk management panel—three very experienced risk managers in different organizations dealing with similar issues and coming to three different solutions. All involve some form of retaining risk.

Overall, we hope people leave the conference with a better idea on how select a domicile. There’s a lot of misinformation out there. Some domiciles promote themselves without providing all of the critical decision factors. There are very clear items that should be taken into consideration when deciding between offshore versus onshore.

The 8th Annual Canadian Captives & Corporate Insurance Strategies Summit will be held May 16 – 17, 2012 at The Sutton Place Hotel in Toronto. For more details, including full agenda and registration, visit SAVE 10% – Register using VIP code CITB10.