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Parametric coverage and smart contracts will definitely be part of the solution in covering intangible assets. The emphasis will be on incorporating such coverages with proactive analytics and recovery services, as part of a more holistic value proposition.
Collaboration – or co-opetition – with captives:
Expanding the insurance value proposition is not something insurers will do on their own. Beyond ecosystem partners, it’s likely that traditional incumbents will work more closely with captives and their multinational corporate owners as they have become more important to the reinsurance market.
More multinational corporations have set up captives and directed more premium to them because of the rising costs of transferring risk to the market, rising to an estimated 6,191 captives worldwide in 2022, based on the latest research. In 2022, the captive market grew to US$250 billion in total gross written premium, according to EY NextWave (pdf) Insurance research. That growth is expected to continue, especially relative to the most volatile and higher-cost risks, such as cyber threats and those associated with “brown” industries.