The Spring team has been participating in the CICA organization and events for about a decade now, and we find that their annual international conference yields one of the strongest turnouts and value in the captive industry. This year was no exception. Not only was the event enriching from a professional standpoint, but I was also pleased to have missed yet another Nor’Easter here in Boston as I soaked in some warmth in this year’s conference locale, Scottsdale, Arizona.

While it might take some time for me to put pen to paper to document all my thoughts, during such a busy conference season. As a team we like to recollect key learnings and themes from each event we attend. It helps us ensure we are up-to-date on industry trends, and, we hope, it helps you stay in the loop too! Here are my initial thoughts recapping of the 2018 CICA International Conference.

 

  1. Change

Given that the theme for this year’s conference was “The Challenge of Change”, I was not surprised that the topic was prevalent. The captive industry is just one of many that is facing changes on many aspects. One that everyone’s been talking about are the implications of the new tax law. Luckily we had a few speakers there to help and advice.Captive Insurance Innovation

The other major topic of discussion regarding change was the growing use of captives to address cyber risks. I spoke regarding the benefits of using a captive for cyber risks along with a high level overview of a survey Spring undertook with the objective of understanding captive owner’s outlook to cyber insurance and their interest in placing captive risks in the captive.

 

  1. Going Global

CICA, being the only non-domicile specific conference, is one that addresses issues both domestic and international. A session that particularly interested me was one where (insert names of the speakers) two representatives from the European Captive Insurance and Reinsurance Owners’ Association (ECIROA) provided a big picture overview of the European captive space, including domiciles and trends. A later session outlined lessons learned from setting up large captives for multinational organizations, going over things like baseline data and requirements, internal marketing, optimum capital retention and diversification. Further, Nicholas Frost, Gabriel Hoschneider and Esperanza Mead led a discussion on Latin American captives and other emerging markets, highlighting opportunities for growth and expansion.

 

International Captive Trends

 

 

  1. Future-ThinkingThe Future of The Captive Industry

     

It’s not enough to be armed for the present, but in all professions, captive and otherwise, it’s critical to be prepared for what the future might bring, and try to shape it positively. That’s why a panel from Butler University spoke to the CICA audience about recruiting and training millennials, emphasizing the importance of captives to further their knowledge of the insurance industry. The group went through a case study in which students conducted a captive feasibility study and established a process for implementation. They also offered tips on how to attract and retain young talent. On a similar note, Temple University students, staff and colleagues presented “Fueling the Quality and Quantity of the Next Generation of Captive Leaders”, which underlining mentorship as critical and explaining best practices for creating a mentor program.

 

 

  1. Actuarial

Actuarial work is obviously at the heart of risk management, but sometimes it doesn’t get a lot of spotlight at conferences. At CICA 2018, that wasn’t the case.

Firstly, a group of consultants, actuaries, regulators and captive managers offered a comprehensive view of actuarial reports – what should be included, how to pull it together, how it should be utilized and items often overlooked throughout the process. A later session, including legal and compliance professionals, provided a thorough review of risk distribution and how it can be achieved and measured.

Captives and Tax Reform

  1. Taxes

As I mentioned earlier, tax reform and its implications for captives were a major discussion items at the conference.

One group specifically addressed tax reform and how its code will affect captives and their entities, including tips on revisiting your strategy for sound tax efficiencies with your captive. A group of tax lawyers later closed out the conference with a presentation on the consequences of the Avrahami case, IRC modification due to tax reform, and tax provisions to consider state-by-state.

 

  1. Utilization

Due in part to emerging risks and markets, every captive needs a thorough review every now and then to ensure it’s having the maximum effect. This is what Spring’s Managing Partner, Karin Landry, presented on, along with Steve McElhinney and Brian Johnson. The group emphasized the need for regular captive refeasibility studies and highlighted new areas of opportunity for captives. Spring has led many projects involving captive optimization and refeasibility, and we have an effective, recommended process to help companies undergo such initiatives. From a needs assessment to new and emerging coverages, to restructuring your captive to allow for modifications, we are experts in finding a solution that’s right for you. You can learn more about our captive optimization practices and suggestions here.

Further, during “Expanding Your Captive Utilization”, a panel further expanded on the subject, pointing out the importance of regulatory changes, particularly when it comes to hospital-owned captives, in discovering and reassessing lines of coverage. Lastly, CICA attendees learned how to “spice up their captives” by exploring new benefits and advanced captive program placements that may now be an option due to changing tax and insurance landscapes. This session covered federal and state regulations, ERISA implications and more.

 

I hope you enjoyed my overview, whether or not you were able to make it to the CICA International Conference this year. I found it a valuable experience and particularly enjoyed meeting new people and visiting with existing clients and colleagues. As you can see, I wasn’t just in it for the Arizona craft beer tour that kicked off the three-day event. I was paying attention too!

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Prabal Lakhanpal

Prabal Lakhanpal

Prabal is a Senior Consultant with Spring and leads technical and management support in the areas of employer-sponsored and voluntary employee benefits, product development, technology solutions and captive insurance. Prabal joined Spring in 2015 as a graduate from Babson College, where he graduated with a master’s degree in Business Administration. Prior to joining Spring, Prabal worked as a consultant and advisor to clients in various industries and sectors.
Prabal Lakhanpal

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