Christopher Gallo
Managing Director

In an age defined by technological upheavals, economic uncertainties and regulatory shifts, the Silicon Valley Bank collapse  – the largest since the 2008 financial crisis – made an indelible mark, as did the lesser mentioned but more critical collapse of Credit Suisse, Switzerland’s second largest bank. Both set the stage for a historic year of bank failures and eroded consumer trust.

The landscape heading into 2024 remains fraught with escalating cybercrime, an evolving regulatory environment and shifting customer expectations. Amid the palpable pressure and vulnerability felt by bank directors, an increasing number of banks, both large and small, are leveraging captive insurance as a strategic risk management solution.

Captive Insurance Utilization on the Rise
Captive insurance is increasingly part of a bespoke risk management strategy designed to address complex and evolving risks that are often deemed too-difficult, -impossible or -costly to insure through traditional channels. The premiums from owning an insurance company can inject vitality into cashflows, while assuming part of the risk can foster a stronger risk-mitigation culture and help develop the agility to navigate challenging situations. This proactive approach provides comprehensive risk coverage and fortifies the bank’s balance sheet and organizational resilience.

The banking industry’s embrace of captives is on the ascent. The pandemic fueled a remarkable increase in captive insurance formations across industries, nearly doubling in 2020 and contributing to $60 billion in gross premiums—up more than $6 billion from the previous year, according to Marsh’s 2022 Captive Landscape Report. Banks mirror this trend. Aon’s 2021 Benchmarking Survey found a 90% increase in crime and fidelity being underwritten by banking captive clients since 2016. This ongoing trend in captive insurance adoption aligns seamlessly with businesses seeking greater control over their destinies in an ever-evolving economic landscape.

A Real-life Look at Captive Insurance in Action
Imagine a bank that has experienced several data breaches, resulting in substantial financial losses and reputational damage. It’s been struggling in the aftermath with compliance costs and penalties, mostly related to cybersecurity. A captive insurance company focused on cybersecurity risks could have provided coverage tailored to the bank’s specific risks and vulnerabilities, providing protection against data breaches, privacy violations, legal expenses and potential regulatory fines.

Although this example is hypothetical, real banks use this financial strategy to protect against cyber risks and the corresponding fallout.

A bank’s commitment to proactively manage cybersecurity risks through its own captive insurance company can also help enhance its reputation. Demonstrating a strong risk management framework and robust insurance coverage indicates that the bank is taking necessary steps to protect its customers’ data and maintain their trust.

A Stronger Approach to Risk Management and Profitability

The banking industry’s ability to navigate an intricate landscape of risks, soaring insurance premiums and regulatory compliance pressures hinges on embracing innovative risk management solutions Owning a captive insurer can allow a bank to gain greater control of insurance costs, fill coverage gaps and generate investment income, helping bank directors manage through challenging and unpredictable times.


Christopher Gallo

Managing Director

Christopher Gallo is a managing director at CIC Services LLC.  He brings a wealth of expertise from his distinguished 35 year career with the Connecticut Insurance Department.  Throughout his tenure, he gleaned invaluable insights into the regulatory landscape, emphasizing the criticality of sustainable liquidity and cash flow in any enterprise.


Mr. Gallo is well equipped to guide businesses towards financial resilience.  He champions the utilization of captives as a strategic tool, highlighting their ability to not only ensure survival but also foster thriving resilience in any economic environment.  His passion lies in empowering organizations to navigate complex insurance dynamics and achieve long-term success.