Sandra participated on a panel discussion at the SIIA 40th Annual National Conference & Expo in October titled “What Brokers Really Need to Know about Working with Captive Managers.”
Park Eddy from Active Captive Management and Ken Kotch from Ryan, LLC joined Sandra on the panel. The panel discussed how the Broker and Captive Manager work together to best serve their joint clients.
Major Takeaways from Panel
Sandra and her fellow panelists highlighted these points:
- The market is hardening: The panel discussed the hardening market where clients are seeing rising premium rates (20+%), reductions in limits and capabilities, and cancelation increases. All of this hardening is in absence of significant claim payouts.
- Speak as one unified voice to the client: Captive Managers partner with brokers to fill in gaps in coverage for the client. It’s critical that the broker and captive manager provide one valuable solution, delivered in one consistent voice.
- Eliminate duplicative coverage: After filling in gaps in a client’s coverage, it is key for the team to cut products that are overlapping.
- Brokers benefit from working with captive managers: A complete risk mitigation solution leads to a happier client whose captive company fills in gaps in coverage as well as potentially being a profit center. Also, fruitful broker relationships with captive managers create access to a broader network of professionals that is likely to provide the broker with new business opportunities.
- Captive Managers often fill the role of a quarterback: We are creating an insurance company so a number of qualified professionals with specific skills such as actuary, legal, and tax need to be brought to the team. Captive Managers have the expertise to recruit and coordinate these disparate functions to deliver on best practices.
- Accounting experience for Captive Manager: Sandra recommended that accounting expertise, especially tied to insurance, is particularly valuable for this leader.
- Recent business interruption losses due to COVID shutdowns are a big issue: Many brokers have unhappy clients who have suffered losses due to the pandemic. Given that traditional insurance is typically not paying business interruption claims, captive insurance can cover these losses. This should be attractive to brokers’ clients.
- Code of conduct important for clients and brokers: Sandra discussed her work on a SIIA committee that created and distributed its code of conduct for Captive Managers. Clients and brokers should assess a Captive Manager’s adherence to these principles.
- Quarterly claims reviews are important: Firms get busy and often neglect to make the appropriate and required claims for losses. These reviews are significant to ensure that a captive insurance company is taking on the required financial risk transfer within a company.
SIIA members can view the complete webinar on SIIA’s Canoe site.
Brokers are encouraged to contact Sandra for more discussion about these best practices. Sandra can be reached at firstname.lastname@example.org.