Congratulations to the Vermont Captive Insurance Association (VCIA) on its 28th Annual Conference. It was great to see the more than 1100 attendees, 100 exhibiting companies, and 60 expert panelists that convened in Burlington.
The bond bull market has been running hard for over 30 years but it appears to be over as long-term rates hit historic lows in 2012. Many investors have never lived through a rising interest-rate cycle and aren’t prepared for a secular bear market in bonds. As you can see in the chart below, the last bond bear market lasted just as long as the current bull.
Rising rates can inflict significant damage to bond assets which are supposed to be the safe side of an investment portfolio. When interest rates rise, the market value of bonds falls and the losses can be substantial.
Marsh recently published its 2013 Captive Benchmarking Report, analyzing 886 captives for benchmarking analysis, representing approximately 15% of all captives globally. One key finding is that more than half of the investments made by captive insurance companies consists of loans to their parent companies, a growing trend since the economic downturn of 2008 when captives were heavily invested in equities. The motivation behind intercompany investments with the parent entity or affiliates is to minimize the cost of capital employed in the captive and enhance the parent company's liquidity. Additionally, the parent company has greater control over the captive’s invested assets.
Runnymede Capital Management named Best Customer Service in Investment Management at US Captive Services Awards
Morristown, New Jersey, September 10, 2012 – Runnymede Capital Management (“Runnymede”) has been awarded Best Customer Service in Investment Management at Captive Review’s US Captive Services Awards, an event celebrating excellence in the delivery and management of captive insurance. The event was attended by over 200 captive insurance professionals from across the United States.
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