By Bill Eleamos
I am just back from the Western Region Captive Insurance Conference. It was great to be in person with many of my colleagues. And, yes, the Western heatwave got us in Salt Lake City. Daytime temperatures hit 105.
As we expand our client base in the West, the Capterra Risk team felt it was important to invest time in the region – learning about the latest issues and trends there.
I want to briefly update you on 4 insights I gained while at the conference. Capterra already addresses these areas of interest, but it is always good to analyze our best practices to determine if we can improve.
1. The commercial insurance market continues to harden, leading to more captive formations.
Many businesses are experiencing the following in their commercial insurance policies:
- Rates increasing by 20% – 30%
- Deductible increases
- Retraction or decrease in limits
- Added exclusions to coverages
2. As captive formations and programs become more popular, the industry is seeing a growing interest in several lines of coverage in 2021.
- Medical Reimbursement/Stop Loss
- Workers Comp
- Business interruption
- Auto liability
Captive policies fill gaps in the insured Company’s traditional risk management program providing coverage where there otherwise was none or very limited coverage. Captive Owners and Managers may want to consider moving coverages to their captive, leverage their captive when negotiating their traditional renewals, and request that their traditional insurance carrier and/or broker work even closer with their captive management team.
We should discuss whether you have risk in any of these areas that are not currently insured by your existing policies. If so, your captive may be an appropriate tool to insure for these exposures.
3. As always, there were many discussions focusing on best practices for captive owners and managers. They included confirming:
- The captive is adequately capitalized.
- The captive has the ability to pay claims when they arise.
- The captive is a licensed and regulated insurance company in the state where it operates.
- The captive utilizes reliable underwriters and actuaries to price premiums with an arm’s length approach.
- The captive pays premiums in a timely manner.
- The captive properly documents all activity including but not limited to claims meetings, board meetings, business plan changes, claims procedures, etc.
- The captive’s insurance policies are working cohesively with the insured company’s commercial insurance policies.
At Capterra Risk Solutions, we focus on these practices intently.
4. We discussed the implementation and growth of CICA’s NEXTGen Program which is a group of young & new professionals in the captive insurance industry.
The program will concentrate on the career development and networking opportunities for young professionals interested in the captive insurance industry. We hope to get more involved.
As a company interested in investing in our Industry, Sandra Fenters is involved in Advocacy efforts on Capitol Hill and Mentorship Programs to aide new captive professionals in their professional growth and career advancement.
We hope to see you in-person soon
As our country continues to remove restrictions after the COVID-19 pandemic, the Capterra team has been traveling more and more. We have made an effort to visit clients, service providers, and colleagues.
In an ongoing attempt to stay abreast of the latest developments in the insurance world, we will be attending the North Carolina Captive Insurance Association Conference in late August/early September and SIIA’s National Conference in Austin in October.
See you then!