Colleen McHugh looks at the effect of conditions in the wider financial landscape on captive insurers and the impact of oil prices and interest rates.
Colleen questions if government bonds are an appropriate asset class for insurers. She also recalls the clarification by the Bank of England that although inflation is very low at the moment, the next interest rate move will in fact be up – although without ever mentioning timings on that potential rise.
Colleen addresses the potential impact that interest rates might have on captives. She defends that any investor wants to invest in an asset class that is not overvalued – which government bonds are.
Colleen discusses the impact of oil prices on global PLC and captives. She also addresses other strategic alternatives in order to shake off the constant pressure to cut costs.