At the end of 2022, Vermont became the largest captive domicile globally with 639 active captive insurance companies. So, it was only fitting that the Vermont Captive Insurance Association (VCIA) had one of the biggest turnouts this year at their annual conference, which brings together insurers and reinsurers, captive owners and risk managers, regulators and other industry professionals to network and discuss current trends in the industry. This year the Spring team and I had the pleasure of once again exhibiting and speaking at the conference in beautiful Burlington, Vermont. Below are some of the topics that took the spotlight.
1) Managing economic fluctuation
From groceries to rent it seems like nobody can avoid inflation, which is no different in the captive insurance and risk management sectors. Due to increased claims, stricter underwriting and high healthcare costs, many employers are looking into alternative risk financing options to stretch the dollar. Below are some of the sessions from VCIA I found most pertinent when addressing the economic landscape.
– In a session titled “The Economic Landscape & Your Captive’s Investment Portfolio,” speakers reviewed how interest rates, inflation, and other economic indicators have changed the captive industry post-COVID.
– The session “Impact of Inflation on Your Captive” reviewed how rising inflation and supply chain interruptions are impacting the captive industry, and what we can expect moving forward.
2) Pitching captive insurance
Although captive insurance can increase savings, reduce risk, and lead to investment opportunities, C-suite and other stakeholders may be hesitant due to resources and risk. No matter how efficiently a captive program is designed, it can’t be maximized without buy-in from all parties. Here are some presentations I found most insightful on boosting communication.
– Two captive board members and a consultant presented on “Innovative Ways to Fire-Up Your Board,” where they provided tools and tactics to boost some life and creativity into captive board meetings.
– My colleague, Karin Landry was accompanied by a captive owner and a tax auditor to discuss the need for strong communication amongst risk managers, captive owners, board(s) and other parties to ensure the captive remains successful. The session included a list of recommended Key Performance Indicators (KPIs) for risk managers to have as a tool in their toolbox when illustrating captive performance to other stakeholders.
3) A look forward
In just the past half decade we’ve seen drastic developments globally including devastating climate events, a widespread pandemic and war spreading overseas. These events remind us that there are always factors beyond our control that can complicate established best practices, but VCIA speakers gave their views on what’s to come.
a) Prepping the next gen
As an annual attendee at VCIA it was great to see the sheer number of new faces and developing talent at the conference. This year VCIA made sure to include an array of introductory level sessions designed to solidify foundational captive knowledge for those entering the industry. Some of the sessions I found most intriguing include:
– A two-part session titled “(The) Newcomer’s Guide to the Captive Industry” brought emerging leaders together to express their unique experiences in the captive space and tips for others entering into captives for the first time.
– In an interactive discussion group on “Building Talent in the Captive Industry,” industry leaders discussed major workplace challenges and tactics for building a strong talent base that will one day drive the future of the industry.
b) The future of captive insurance
Although often thought of as a traditional sector, we continue to see innovative approaches to risk financing across employee benefits and P&C. Here are forward-looking presentations I found interesting.
– A captive owner and business professional explored recent innovations and solutions in the ‘captive insurance laboratory’ during their session, “Where Will Captives Go Next? The Latest Uses for Captives.”
– One group of speakers took an interesting approach and spoke on “Leveraging New Tech and Data Visualization Tools for Captives.” They reviewed how various stakeholders can utilize tech to bolster actuarial analyses and efficient decision-making.
As a regular VCIA attendee, I found this conference to be the most fun to date. Aside from all the happy hours, free giveaways and tasty meals, I had a great time reconnecting with industry leaders and deepening my knowledge of captives. On behalf of Spring, my colleagues and I enjoyed the opportunity to exhibit and look forward to next year’s conference. Lastly, I had the pleasure of being accompanied by a captive owner and stop loss carrier to present on risk management strategies that are impacting employer-sponsored health plans and the rising costs associated.