Davies Q&A – Thomas McMahon

Thomas McMahon is Executive Vice President, Davies Captive Management

When Thomas McMahon arrived in Bermuda in 1987, he expected to stay for a couple of years before moving on. Nearly 40 years later, he’s still there.

Recently recognised with a Lifetime Achievement Award, Tom has spent almost four decades helping organisations use captives to manage risk more effectively while witnessing Bermuda’s emergence as the world’s leading captive domicile. Along the way, he’s advised clients across multiple sectors, chaired industry bodies and seen the captive market evolve from a niche solution into an increasingly important part of corporate risk and capital management.

We spoke to Tom about the changes he’s seen, why Bermuda continues to lead the market and what the next generation of captive professionals should focus on.

This year you received the 2026 Fred Reiss Lifetime Achievement Award, after almost four decades in the captive industry. Looking back, what first brought you to Bermuda and what has kept you there?

If you’d asked me when I first arrived in Bermuda whether I’d still be here nearly 40 years later, I’d have laughed.

When I qualified as an accountant in Ireland in 1987, the plan was to spend a couple of years in Bermuda, perhaps head to Australia afterwards and eventually return home. Like many newly qualified accountants, I went along to a recruitment presentation and it sounded like a great opportunity.

I joined Coopers & Lybrand as an auditor, where many of my clients were captive and commercial insurance companies, including ACE ( now part of the Chubb Group), which was a very different business then to the one people know today. It gave me an early appreciation of both the Bermuda market and the role captives could play.

After several years in audit, I moved briefly into industry before joining a captive management company. Looking back, that’s where I found my professional home. Apart from a series of mergers and acquisitions that eventually brought me into Davies, I’ve been doing essentially the same job ever since.

What has kept me here is the variety. Every client is different and the risks they’re managing are constantly changing. I’ve also been fortunate to work with organisations from all over the world, learning about different industries, cultures and approaches to risk management. After nearly four decades, I’m still learning, and that’s what has kept the job interesting.

What do you see as the most significant changes since you first entered the market?

The biggest change has been how much the market has matured. Regulation has become far more sophisticated, but without losing the flexibility that has always made captives attractive.

From a Bermuda perspective, two developments stand out. The Bermuda Insurance Amendment Act 1995 introduced the class-based licensing framework, recognising that a single-parent captive shouldn’t be regulated in the same way as a large commercial reinsurer. Then the Segregated Accounts Companies Act 2000 made captive structures accessible to many more organisations and helped drive further growth.

Governance has evolved just as much. When I first arrived, regulatory requirements were relatively light. Today, reporting, governance, anti-money laundering and Know Your Customer (“KYC”) requirements are all part of regulatory environment. That’s made the market stronger and more credible while preserving the proportional approach that has served Bermuda so well.

Bermuda has played a central role in the evolution of the global captive industry. Why has Bermuda remained such a dominant captive domicile?

One of Bermuda’s greatest strengths has always been the close relationship between government, the regulator and the industry. There’s always been a willingness to work together to understand how the market is evolving and adapt the regulatory framework to support it.

Years ago, we used to describe Bermuda as “the insurance laboratory of the world”, and I still think that’s true. Whether it was introducing segregated accounts legislation, the class-based licensing framework or, more recently, regulatory sandboxes, Bermuda has shown it’s prepared to innovate when the market changes.

That’s backed by an exceptional ecosystem. Within a relatively small jurisdiction you have experienced captive managers, lawyers, actuaries, auditors and other advisers, alongside one of the world’s leading reinsurance markets. Clients can accomplish a great deal in a single visit, which is difficult to replicate elsewhere.

The market has become much more international since I arrived in Bermuda nearly 40 years ago, and that diversity has only strengthened what was already a very collaborative environment.

Captives are increasingly being discussed in boardrooms beyond the traditional Fortune 500 audience. What is driving that change?

Captives have always been cyclical. When the insurance market is soft, people tend to question whether they still need one. When capacity tightens and premiums rise, interest inevitably returns. That’s a pattern I’ve seen throughout my career.
The difference today is that organisations are dealing with a much broader range of risks, from cyber and AI to climate-related exposures. As a result, they’re taking a longer-term view of risk financing.
I often tell clients you shouldn’t be fixing the roof when it’s raining. If you’re thinking about a captive only after the market has hardened, you’ve probably left it too late. The best decisions are made before you’re under pressure.

Throughout your career, how have you seen attitudes towards risk management and captive ownership evolve?

One of the biggest changes has been who is involved in the conversation.

Years ago, captives were largely the domain of the risk manager and were viewed primarily as an insurance solution. Today, they are recognised as strategic financial assets, so finance teams, CFOs and boards all want to understand how capital is being deployed, what value it’s generating and how it supports the wider business.

That reflects a broader change in how organisations think about capital. They’re asking whether a captive is being used to its full potential, whether it should cover additional risks and whether the structure is still right for the business.

The most successful captives are those where risk management and finance work together. Risk managers bring a deep understanding of exposures, while finance teams provide the wider capital and corporate perspective. Boards are also far more engaged than they once were, with governance reflecting the captive’s growing strategic importance. When those different perspectives come together, captives become much more than insurance vehicles—they become an integral part of long-term business strategy.

Davies has continued to invest in and expand its captive management capabilities. What opportunities do you see for the business and the wider captive sector over the next few years?

We’re seeing growing interest from organisations that perhaps wouldn’t have considered a captive ten years ago. Some are responding to changing insurance market conditions, while others are looking for greater control over emerging risks or a more strategic way of deploying capital.

One of Davies’ strengths is the breadth of expertise we can bring to those conversations. Clients increasingly need actuarial advice, claims expertise, regulatory support and governance alongside day-to-day captive management. Having those capabilities within one business means we can look at challenges from different perspectives rather than in isolation.

As captives continue to play a bigger role in organisations’ risk financing strategies, that ability to bring different specialists together to solve complex problems will become increasingly important.

Looking ahead, what developments do you think will have the greatest impact on the captive market over the next decade?

The range of risks that organisations are managing will continue to expand. Artificial intelligence is an obvious example. As businesses develop AI-enabled products and services, they’ll face new questions around liability, governance and risk transfer. Climate-related risks and ongoing geopolitical uncertainty will also continue to influence how organisations think about resilience and long-term risk financing.

For me, though, the bigger question isn’t which risk comes next. It’s whether a captive is still doing the job it was established to do.

I always encourage clients to step back every few years and ask themselves whether their captive still reflects the business they have today. Should it be writing different risks? Is the structure still right? Does it still support the organisation’s wider objectives?

A captive shouldn’t be maintained simply because it’s always been there. It should evolve alongside the business it exists to support.

That’s where captive managers add real value. We’re not just there to administer the programme; we’re there to challenge our clients. At board meetings we should be asking whether they’ve considered the implications of AI, how climate change could affect their risk profile, or whether emerging cyber exposures should be brought into the captive. Helping clients think ahead is just as important as managing today’s programme.

Finally, after almost four decades in the industry, what advice would you give to the next generation of captive professionals?

Stay curious. The captive industry never stands still. Risks change, markets evolve and regulations develop, so you must keep learning throughout your career.

I’d also encourage people not to stay within their own discipline. Although I trained as an accountant, one of the most valuable things I did was spend time with clients at their own operations. It’s one thing to review financial statements in Bermuda; it’s another to walk around a manufacturing plant, a hospital or a logistics operation and see the risks they’re managing every day. That gives you a much better understanding of why the captive exists and how it supports the wider business. It also builds stronger relationships because clients know you’re interested in understanding their organisation, not just administering an insurance company.

I’d also encourage young professionals to get involved in the industry. I’ve been fortunate to serve organisations including the Bermuda Insurance Management Association, the Bermuda Captive Network and the Insurance Advisory Council. Those experiences broaden your perspective, help you build lasting relationships and give you the chance to contribute to the future of the industry.

Above all, listen to people with experience, learn from your clients and never assume you know everything. After nearly four decades in the captive industry, I’m still learning. That’s one of the reasons I’ve enjoyed the career so much.

If you would like to continue the conversation, get in touch with Thomas McMahon,  Executive Vice President, Davies Captive Management at Thomas.McMahon@davies-group.com