Spring to Sponsor 2018 Cayman Captive Forum

The Spring team is delighted to announce that we will be sponsoring the Cayman Captive Forum which runs from November 27th to the 29th in the Cayman Islands.

While the conference’s location and weather (especially in November) are certainly a treat, we swear that’s not the only reason we’re going. In fact, Spring has been involved with the Insurance Managers Association of Cayman (IMAC, the host group) for over a decade, and its events and resources have never let us down. This year we will be joining over 1,400 otherCayman Captive Forum industry professionals to network and share our experiences and best practices. Attending conferences is one of the strongest ways that we keep our pulse on trends, and with such a large captive market in the Cayman Islands, this is one of the best.

A group of impressive speakers will present on topics like:

  • Risk distribution
  • Tax considerations
  • Regulatory updates
  • Cyber risk
  • Telemedicine

And much more!

If you are heading to the Cayman Captive Forum too, please stop by booth #7 to say hello to our team. We’ll be giving out a great raffle prize!

5 Questions to Answer Before Renewing Your Health Insurance Plan

Whether you’re an office manager, business owner, or a human resource or benefits professional, renewing your company’s health insurance plan may become automatic. Considering alternatives is a daunting task that many feel they lack the bandwidth to handle. However, at a time when healthcare costs are rising, the market is in flux, and employees are expecting more and unique benefits, choosing the most convenient option is probably not your best bet.

It’s imperative to routinely review your package, your results and rethink your strategies to make sure you’re minimizing your costs while giving employees the best coverage at a reasonable rate. You may think you’ve considered everything, but you probably haven’t. Before your renewal date, make sure to address the following questions.

  1. Does your medical trend align with market standards?

Before you renew, take a hard look at the medical trend being used this year for next year’s renewal. The market has been seeing downward trends, so you’ll want to make sure you’re seeing that in your rates.  For 2019, renewals are in the low single digits.

  1. If you’re self-insured, have you considered medical stop-loss?

While advantages of self-insurance include flexibility and savings opportunities, self-insured companies are also exposed to an extra level of risk – unexpected, catastrophic loss that they’re expected to cover themselves. Stop-loss insurance, sometimes called catastrophic insurance, can help mitigate this risk. Medical stop-loss is coverage specific to healthcare spenEmployee Benefits Communicationd, and involves the establishment of a threshold by the employer over which they have external coverage for.

With an uncertain future for US healthcare, medical stop-loss is something all self-insured organizations should include in their program. Employers will need to consider where the stop-loss program attaches to make sure you don’t over or under purchase coverage.  Also, captive stop-loss solutions should be considered to maximize your savings, providing a savings of 10% or more on your stop loss spend.

  1. Do you have the right tools in place to support and communicate benefits with your employees?

You may have an impressive health plan and competitive benefits offerings, but if your employees aren’t aware of them, don’t know how to utilize them, or find them irrelevant, you’re not going to see the results you’re hoping for.

It might be time to give these questions some thought:

  • How and when are you telling employees about what’s available to them?
  • Do they truly understand their options?
  • Do you know what benefits your workforce finds most valuable? Are you giving them what they want, or what you think they want? Think about your demographics here.
  • Do you have streamlined processes for benefits administration, claims filing, etc.?

Consider a formal or informal survey of employees to find out what is working and not working. Further, there are a number of administrative tools, such as Bswift, that you may want to evaluate. For compliance and HR initiatives, ThinkHR and like platforms may be appropriate.

  1. Is it time to consider an actuary?

An actuary is a certified professional that measures and predicts insurance risks and premium rates. They are math-based risk experts and can help organizations with insurance policy development, forecasting, valuations, audits, and more.

Most small businesses believe they have no need for actuarial services. However as organizations grow and consider more advanced and varying insurance options, the greater the need for an actuary becomes. While the work of an underwriter is crucial, actuaries take a deeper look at the numbers. They are a neutral third party, and can offer crucial information such as how much volatility you can expect over a one and five-year period. These insights allow you to make smarter insurance decisions.

  1. Could your organization benefit from alternative funding strategies?

If you’re fully-insured, have you thought about aiming for a self-funded structure? If you’re self-insured, have you thought about a captive insurance company? If you’re a small businesses, have you thought about an Association Health Plan (AHP)?Employee Benefits Funding

We recommend thinking about these alternatives every couple of years. As businesses change and grow, along with market regulations and options, what once made sense for an organization may no longer be the best fit.

Captives provide unparalleled transparency of and control over an insurance program, which helps with cost savings and customization. Once only an option for jumbo-sized employers, more and more smaller organizations are utilizing a captive structure, either as a standalone captive or part of a cell or group captive.

Further, the AHP market is expanding quickly, due in part to new regulations passed earlier this year. This is a great avenue for a small business to benefit from economies of scale and get the same rates as a large employer. For more information about how to set up or join an AHP, please get in touch.

 

Healthcare is complicated, but with that complexity comes new and exciting opportunities. Before you decide to maintain the status quo and renew your plan, take some time to think about what’s truly best for your organization and its workforce.

7 Ways Captives Provide Clients a Competitive Edge

A recent report from AM Best concluded that, based on their ratings, captive insurance companies outperformed commercial market carriers yet again in 2017. This finding was based on a hard look at balance sheet strength, operating performance, and business profiles of captives as compared to their commercial counterparts.

As long-time captive consultants, we’ve seen a range of clients benefit from a captive structure and are well-versed in their advantages. The AM Best report is a testimony to the positive role captives can play and how they’re able to provide a competitive edge to the organizations using them.  Some of the key advantages include:

  1. Homogeneous Risks

Whether a Single Parent Captive or a Risk Retention Group (RRG), the insureds of a captive are going to have similar risk profiles and diversity. A Single Parent Captive insures the parent company, so all its risks belong to one entity. RRGs are made up of like companies with similar missions and business products/services, such as a group of universities. In both cases, the homogeneity of risk will benefit the captive by establishing a certain level of predictability which helps with the consistency of rates and an unsurprising loss ratio.

 

  1. Underwriting Profit/Results

According to AM Best, the Captive Insurance Composite (CIC) experienced a 86.4% five-year combined ratio, while the Commercial Casualty Composite (CCC) had a 99.9% five-year combined ratio. Captives enjoy such underwriting profits for a number of reasons, primarily the fact that risk management, control, prevention and mitigation are all at the heart of the captive’s purpose. Organizations are able to benefit from their own good experience. Captives facilitate transparency and more access to data. This allows organizations to act in a proactive manner and implement risk mitigation and control protocols in an almost real time basis. Comparatively, a fully insured commercial market policy may result in a delayed information transition – most commercial insurance arrangements provide reports a quarter after year-end.  In addition, frictional costs are lowered with a captive.Captive Insurance Advantages

 

  1. Return on Investment

A major advantage that organizations with captives have over commercial carriers is the opportunity to recapture part of the premiums. Captives require capital infusion to start and get off the ground. The profits/savings from the insurance carrier accumulate in the captive and can, over time, begin to yield impressive returns on investment. Most feasibility studies use an internal rate of return or a hurdle rate to help visualize potential savings. This makes captives a great alternative for deploying capital and earning a consistently positive return on income, in addition to being able to use it strategically for reinsurance purposes.

Another pro of captives is the ability to evaluate their ROI evaluated against  their hurdle rate as their internal rate of return. A company can determine if an investment will give them adequate benefit or savings over a given timeframe based on their rate of return, and then decide if that investment is worth following through with, or if another solution is more economically sound.

These factors combined allow captives a healthy sum of capital and positive balance sheets.

 

  1. Competitiveness

Commercial carriers are sometimes unable to understand the true needs of the insureds and are limited in their offerings. Captives create competitiveness in the market and can compel commercial carriers to offer better terms and costs by virtue of a captive’s existence. In many instances, commercial carriers are threatened by the captive’s ability to take on all the risk and become willing to create quota share arrangements. Captives are a unique, tailored solution for the insured(s) and offer an unbeatable level of customization and very little changes in premiums. They have the ability to insure unique risks and are able to fill in the gaps of coverage where commercial markets are unable to do so.

 

  1. Enterprise Risk Management

AM Best defines Enterprise Risk Management (ERM) as, “establishing a risk-aware culture and using tools to consistently identify and manage, as well as measure risk and risk correlations.” An organization that utilizes a captive is likely to have a stronger ERM system in place, when compared to its captiveless peers, since it is partaking in its own experience and thus is more motivated to better manage its risks. In most cases, the captive is a vital cog in the ERM wheel. This close alignment allows for better results for both parties, and a lower total cost of risk for the captive.

 

  1. Retention

Many rated captives have a retention rate of 90% or higher. This is, in part, because policyholders are routinely rewarded through dividend payments from the captive that are significantly higher than any seen in the commercial market. These profits can be used in a multitude of ways to further benefit the captive. For example, policyholders could underwrite additional lines of coverage without the need for more capital, or provide premium holidays on programs, or fund FTEs.Innovative Insurance Strategy

This, combined with the lack of competition means that captives don’t need to shop around for business each year, creating savings in acquisition costs which can then be returned to the captive (e.g. in the form of loss control) to further benefit the insureds.

 

  1. Ability to Identify Emerging Risks

A captive’s structure and foundation in ERM gives it an added advantage of foreseeing emerging risks. Typically, all key stakeholders and the entire risk team of an organization will be involved in the captive’s management and activity. Having a strong alignment between the parent company, the captive, the IT team, the risk experts, the actuaries and other main players means that everyone is on the same page. A captive can make long-term assessments while also flagging and resolving issues quickly. There is no fragmentation of knowledge in a captive setup, and all stakeholders have the same interests. In sum, captives allow organizations to be nimble and react to changing market conditions quicker than commercial market carriers.

 

Conclusion

As AM Best states, captives performed well in 2017, as did RRGs, and it’s projected that success will continue into 2018 and beyond. The US captive market has grown substantially over the past few years, with domiciles like North Carolina and Hawaii experiencing an uptick in captive formation. Further, we’re seeing captives being used more frequently for nontraditional lines of coverage, such as cyber and medical stop-loss, adding to the list of use cases.

Captives are a great tool for insureds to create unique, custom-made solution in partnership with the commercial markets. They facilitate better management of claims – their expenses and adjustments – through accurate estimations.

Lastly, one of a captive’s most important attributes is its flexibility and ability to be swift and proactive, without the typical issues in a commercial insurance relationship.

Continued Pressure from the IRS on Bad Fact Patterns – How to Avoid Trouble

The Courts recently made a decision regarding the Reserve case for the IRS. This is the second case of late that has been decided against a captive owner in an effort to crack down on captives the IRS perceives to have a poor fact pattern, and therefore cannot meet insurance tax treatment standards. For example, captives that have been set up to undertake sham transactions or undertaking transactions that do not meet the bona fide insurance company characteristics would fall into this category.

According to the Avarhami v. Commissioner (“Avrahami”) judgement, the court provided four criteria that result in an arrangement constituting insurance.  These four criteria were also addressed in the Reserve Mechanical Corp (“Reserve”) v. Commissioner case, and are as follows:

  • The arrangement must involve insurable risk
  • The arrangement must shift the risk of loss to the insurer
  • The insurer must distribute the risk among its policy holdersIRS captives
  • The arrangement is insurance in the commonly accepted sense

Reserve outlined these four non-exclusive criteria to establish a framework for determining the existence of insurance for federal income tax purposes.  The court’s opinion focused on the idea of risk distribution, which led to investigating PoolRe Insurance Corp. (“PoolRe”), the stop loss insurer for Reserve. The judgement discusses the transaction in detail and stated there was a circularity of funds that invalidated the pooling arrangement.

To determine if a captive insurer has met the risk distribution criteria as a standalone captive without stop-loss or reinsurance protection, the courts looked at the total number of insureds and the total number of independent risk exposures. It has long been believed that the “law of large numbers” allows an insurer to minimize its total risk and reduce the likelihood of a single claim exceeding the premium received. In the Avrahami and Rent-A-Center court cases, risk distribution passing and failing thresholds have been observed as follows:

  • Rent-A-Center ultimately showed distribution of its risk by insuring the risk for 14,000 employees (workers’ compensation), 7,100 vehicles (auto coverage), and 2,600 stores (general liability coverage) in 50 states
  • Avrahami didn’t show distribution of risk by insuring 3 jewelry stores, 2 key employees, and 35 total employees. Further, one of the stores had 5 low frequency coverages and the other 2 stores had 2 low frequency coverages

Reserve, an Anguilla-domiciled captive, wrote 11 to 13 policies over the three tax years in question and had direct policies for 3 insureds.  Peak Mechanical & Components, Inc. (“Peak”), an S Corp for Federal income tax purposes, was owned in equal 50% shares by two individuals and was the primary insured under all policies. The policies were also issued to two other subsidiaries, although the operations were not significant. Peak operated two facilities and had a max of 17 employees. Reserve did not meet risk distribution based on this exposure profile alone; its exposures were similar in scale to the Avrahami’s.  Reserve contended that it still met the risk distribution safe harbor requirements, by having 30% of its gross premium for each of the tax years for unrelated parties via the reinsurance agreement with PoolRe.  A similar argument was made in the Avrahami case with their reinsurance pool.

Before it is determined whether Reserve distributed risk through the agreement with PoolRe, they evaluated whether PoolRe was a bona fide insurance company. In the eyes of the court, a captive should be able to answer “yes” to each of these questions and provide adequate support to:

  1. Is there no circularity to the flow of funds?
  2. Are the policies developed in an arm’s length approach?
  3. Did the captive charge actuarially-determined premiums?
  4. Does the captive face actual exposures and insurance versus business risk?
  5. Is the captive subject to regulatory control, and did it meet minimum statutory requirements?
  6. Was the captive created for non-tax business reason?
  7. Was a comparable coverage in the market place more expensive, or even available?
  8. Was it adequately capitalized?
  9. Were claims paid from a separately maintained account?

The court’s conclusion in Reserve’s case provided details of the concerns with evidence in support of the first six questions listed above, and concluded that the PoolRe quota share arrangement provided the appearance of risk distribution without actual risk distribution.  The court summary also highlighted the following:

  • Circularity of funds was exhibited with PoolRe receiving and distributing the same amount of money to Reserve
  • There was no evidence that the premium payments to PoolRe by Reserve and the other participants were determined by actuaries
  • Contracts were not determined in a like manner, nor using objective criteria

One of the major concerns the IRS addresses with the Avrahami and Reserve cases is that a one-size-fits-all rate for all participants in the pool/reinsurance agreement isn’t valid.  The court also addressed an alternative ground for the case, which would have been to evaluate “Insurance in the Commonly Accepted Sense”. To determine if an insurance arrangement exists, the following factors come into play:

  • Was the insurance company organized, operated and regulated as an insurance company?
  • Was it was adequately capitalized?
  • Were the policies valid and binding?Captive Checklist
  • Were the premiums reasonable and a result of an arm’s-length transaction?

The court summary pointed out several issues in Reserve’s support for answering the above questions, such as:

  • Reserve had no employees of its own performing services and the board members did not know how claims were made or handled.
  • There’s no evidence that activities were performed in its domicile.
  • Claims must have supporting documentation, yet there was no addendum for the program until after the policy date. An employee from the insured signed the checks as opposed to the insurer.
  • Binding and valid policies – policies must, at a minimum, identify the insured.
  • There were peak paid commercial market premiums of $95,828 in 2007 versus $412,089 to Reserve in 2008. This is a 330% increase in insurance premiums. In addition, Peaks premiums vary from year to year with no explanation.
    • Note, the Avrahamis similarly had significant increases in premium spend, with almost an 800% increase over a several year period.

These cases provide us and other captive professionals with guidance and clarity. As the industry grows, cases like these will form the cornerstones of how to properly operate and conduct business as a captive insurance company.

Key Takeaways

The IRS clearly has problems with some of the pooling structures used to qualify captives as meeting the risk distribution safe harbor tests. They are concerned that the premiums ceded to the pool and the transfer of risk into the insurance pool are not commensurate with one another, and that the pools are only being utilized to circle premiums to the captive participants, with each assuming no or minimal losses from the pool.

There should be clear documentation of premium determination by an actuary, illustrating why premiums are reasonable and that sufficient risk transfer exists.  Over time, if the total loss experience and premium ceded to the pool doesn’t produce a long-term average loss ratio consistent with the commercial marker, then the pool’s support in having arm’s-length contracts with each of the participants becomes weak and difficult to defend.  Long term average commercial market loss and loss adjustment expense (“LAE”) ratios for most lines of business generally fall in the range of 50% to 75%, hence the 70% loss and LAE ratio threshold in IRS Notice 2016-66 used to identify captive transactions of interest.

Finally, it is important to show sufficient support in a captive’s business plan, policies, and feasibility studies to address the questions above about an insurer/pool being a bona fide insurance company.

What You Need to Know About RFP’s

The Current State of ‘Employer vs. Insurance RFP’s

 

Employers today often find themselves undertaking a Request for Proposal (RFP). RFPs are an important tool that allow for greater insight into the market. RFPs are used as a mechanism by employers to test the market competitiveness of their insurance programs and collect market intelligence regarding new offerings. The bidding process aids accountability and provides market information on emerging risk management techniques, regulatory changes and recent trends. However, RFPs are a time consuming and an arduous task that require inputs from multiple stakeholders, who often have competing priorities.

Captive insurance companies provide an alternate solution for employers who are looking to escape the rut of undertaking an RFP every few years. Captives provide greater transparency and control to employers over their insurance programs and eliminate the often costly and time-consuming need to bid programs to ensure competitiveness. Captives allow organizations to have a clear understanding of their experience and thereby eliminate the arbitrariness of rate hikes by the incumbent carriers. An RFP can also be an expensive exercise both in terms of tangible and intangible resources. In monetary terms, there are the fees for advisors/brokers/consultants. Additionally, time and effort required by your team are also important factors to consider while evaluating the true cost of an RFP.Insurance RFPs

A bidding exercise is often seen as an opportunity to hit reset on an existing plan and evaluate if the program continues to meet the everchanging needs of an organization. In a dynamic and ever-changing business environment, waiting for an opportunity to bid the program to reevaluate its effectiveness and appropriateness for the organization can result in repairable loss. Businesses need to be able to constantly evolve and change to meet the needs of the market or risk losing its competitive edge.

Captives provide a clear line of sight to the working of the program, thereby allowing for customization in an almost real time basis. A captive framework leads to additional reports and information which further facilitate tweaks and adjustments that benefit an organizations insurance program.

A captive insurance company allows a company to gain true transparency and control of not only their loss exposure, but also the expense structure required to support their programs. This transparency promotes a sense of partnership between the employer and the insurance carrier. Employers with captives have often commented on the change in the relationship dynamic between the two entities, viewing the carrier as a partner than as a market option can have long term benefits.

Organizations that use captives are able to ascertain the need for a change or adjustment in rates without input from the market. Captives rid insurance transactions of opaqueness and thereby results in an open and honest conversations among all stakeholders – insurance carriers, brokers and internal organizational stakeholders.

An integral part of most insurance arrangements is the broker. Broker arrangements can, at times, create a degree of obscurity. Since brokers are usually commissions-based, decreasing premiums or making changes may sometimes not be in the broker’s best interest. This could potentially add another degree of complication and difficulty to the decision-making process. In a captive setting commissions paid to brokers are clearly visible. This clarity of fees generally leads to a clearly defined scope of work for the broker/consultant/advisor. Allowing employers to derive more value from their service providers.

Many organizations may feel pressure compelled to bid frequently, to continually create competitive pressures and achieve better rates. This approach can create an abrasive relationship between the organization, the broker and the insurance carriers. Insurance carriers are looking for long term partners and often may choose to not bid aggressively in cases involving organizations who have a reputation of constantly looking to bid, as this can be disruptive for all parties involved.

 

Case Study

Spring recently undertook an analysis for an organization whose incumbent broker initially quoted a 25% rate increase on the employee benefit program. When threatened with the possibility of an RFP, the incumbent carrier revised their quote to reflect a 10% increase in premium. The organization was disillusioned with the insurance carrier and decided to undertake an RFP – which resulted in an alternate carrier quoting a net decrease in premiums of about 15% along with a multi-year rate guarantee.Captive Insurance

While a 15% rate reduction is a seemingly positive result, the process and effort required to get there was expensive, time consuming and left the HR team feeling beholden to the wishes of the insurance carriers and the broker.

The employer requested Spring undertake an independent review of the information presented to them by their broker and insurance carriers. Spring’s analysis revealed that the organization had a much better loss experience than indicated in the rates provided. The organization is currently considering its options for the upcoming year, including potentially utilizing a captive to underwrite their employee benefit risks. This exercise could have been avoided if the employer was using a captive to insure its risks. At the time of the initial rate increase (of 10%) the employer along with their broker would have been able to quickly ascertain that the rate hike was unnecessary and could have been addressed with a quick discussion with the insurance carrier. Which could have saved the organization valuable time, effort and cost of disruption.

To conclude, companies that are financially sound and have a reasonably predictable insurance risk, are ideal candidates to evaluate the possibility of using a captive. If you are an employer looking for a long-term solutions should consider a captive. Captives provide the benefits of an RFP without disrupting a company’s day to day activities. It also helps bridge the gap of obscurity and trust between your company and your insurance carriers.

To see if a captive solution is right for your company, a captive feasibility study is the logical first step. The study identifies the organization’s goals and objectives, reviews the current state of programs, analyzes the data, and then estimates potential captive savings for each line of coverage. The study determines the most effective program design for the organization, including potential advantages or disadvantages of this alternate funding mechanism.

What the Microsoft Settlement Means for the Captive Industry

Recent legislation around captives have kept us and many of our colleagues on our toes. Last year, we had the Avrahami case. This year we had the Reserve Mechanical case. Now, we’re looking at an interesting turn of events between Microsoft, its captive, and the state of Washington.

For some background, tech giant Microsoft is based in Redmond, Washington. Its pure captive, Cypress Insurance Company, was formed in 2008 and is domiciled in Arizona.

Microsoft captive settlement

In May of 2018, the Insurance Commissioner of Washington state issued a cease-and-desist to Microsoft. This order, number 18-0220, required that Cypress stop selling insurance to its parent company and asked for about $1.4M in unpaid premium taxes.

The insurance Commissioner contends that:

  1. Microsoft/Cypress did not pay 2% premium tax for the business being underwritten by the captive. Within the ten years between the captive’s establishment and the cease-and-desist, Microsoft paid over $91 million in written premiums to Cypress. Washington state law mandates insurance companies to pay a 2% tax based on their written premiums.
  2. Cypress did not hold a certificate of authority to sell insurance in the state of Washington.
  3. The coverage provided to Microsoft through Cypress was not placed through a surplus line broker licensed in Washington.

Surplus lines typically come into play for lines of coverage not usually covered by other, commercial insurers.

The Commissioner argued that, because of the above points, Cypress was violating the following sections of the Revised Code of Washington (RCW):

  • RCW 48.05.030(1) (certificate of authority required)
  • RCW 48.15.020(1) (solicitation by unauthorized insurer prohibited)
  • RCW 48.17.060(1) (license required)
  • RCW 48.14.020(1) (failing to remit two percent premium tax)
  • RCW 4S.14.060(l)-(2) (failing to timely remit two percent premium tax)

On July 1st, Microsoft announced that it had established new policies for Cypress through a surplus line broker, but that didn’t negate the issue. Further, they settled the case with the commissioner in mid-August. The settlement involved a $867,820 payment ($573,905 in unpaid premium taxes and $302,915 in interest and penalties) from Microsoft to the Washington State Insurance Commissioner. As a result, the cease-and-desist has been lifted, and Cypress can continue operations. The Insurance Commissioner of Washington did note that it has its eye on other Washington-based companies using captives.

The announcement of the settlement came around the same time that New Jersey made some of its own captive legislative moves on medical and consumer-goods conglomerate, Johnson & Johnson. The organization, headquartered in New Jersey, has long been utilizing an out-of-state captive and paying taxes on the premiums written to the captive for risks located in New Jersey. However recently, the state decided that, according to the Non-admitted and Reinsurance Reform Act (NRRA), Johnson & Johnson and like companies should be paying taxes on premiums written for all risks within the U.S. , not just those residing in the state. While the company tried to argue that the NRRA uses vague language that seems to only apply to surplus lines of business, they ultimately lost the battle, along with the $55 million refund they were looking for.

What can we learn from these instances?

Captive owners should review their structure based on recent developments and business changes. In light of the changes in the tax code, regulatory changes and the recent case laws, regardless of the state of domicile, it would be prudent to review your captive based on its unique situation and circumstances. Doing so on a regular basis is an advisable business practice.

These recent cases are a step towards a maturing industry and should give captive and insurance professionals the motivation to be as diligent and cautious as they should always have been.

5 Ways VCIA is Future-Focused

The Vermont Captive Insurance Association (VCIA), founded in 1985, is the largest trade association for captive insurance in the world. As such, it’s no surprise that their annual conference yields both an impressive turnout and range of educational sessions. A long-time sponsor and member of VCIA, Spring anticipates the August event each year.

The VCIA 2018 Annual Conference, themed “Where the Captive World Comes to Meet”, was just as high-caliber as past years, but each event tends to build its own unique motif. This year, as about 1,100 insurance professionals gathered in Burlington, Vermont, and 40 presentations were made, the three-day conference seemed to emphasize “the future” most notably. The sessions below, along with general conversations I had with a range of people at the conference, are what led me to identify this theme.

  1. Future-Proofing Your Captive

    This presentation, including Spring’s Managing Partner, Karin Landry, urged audience members to consider emerging risks like climate, and highlighted ways in which one captive has and continues to prepare for the future. Then, Andrew Braille of AES Corporation outlined the organization’s plans for the future, including a 50% reduction in carbon intensity.

  2. Succession Planning: Bridging the Next Generation of LeadersEmerging Risks

    An experienced panel led this discussion on how to nurture and attract captive talent to ensure a bright future for the insurance industry, one that is aging and failing to appeal to millennials. Tips like developing mentoring relationships and utilizing updated technology were given.

  1. Blockchain & Distributed Ledger Technology

    VCIA attendees, myself included, learned a lot about blockchain during this Wednesday morning session. The presenters defined blockchain and explained how it will impact captives and the insurance industry at large in the years to come. Good news – experts expect blockchain to reduce costs, lower risks, increase trust, and save time for insurance professionals as it continues to evolve.

  1. Integrated Solutions: The Future of Risk Management

    Todd Cunningham and Carol Murphy highlighted the efficiencies to be gained by moving from a traditional insurance structure to an integrated model, where 1st excess coverage across lines all operates within the same system. They explained that this is the direction they see the industry will and should go.

  2. The Cognitive Captive: Artificial Intelligence for Smarter Insurance

    Tracy Hassett of edHEALTH, and two others informed attendees about how A.I. will affect insurance risks and the labor market, and explained the role that predictive analytics and “The Future of Mobility” will have.  A special focus was made on driverless cars and their impact on insurance.

To be clear, these are only a handful of informative and strong presentations (you can read about the others here), but the underlying theme is gear up for what’s to come.

I hope you enjoyed the summary, whether you were at VCIA or not. As you can see, I did manage to learn quite a bit despite the bike rides and cocktail receptions!

5 Times Inclusivity Took the Stage at DMEC

As a national sponsor of the Disability Management Employer Coalition (DMEC), Spring has been involved in the organization and its events for over a decade. Each year the team

DMEC

looks forward to the Annual Conference, among other DMEC events and initiatives. This year it took place in the fun city of Austin, and we made sure to do some sightseeing while we were there.

This was my first DMEC conference and I was amazed at the wealth of knowledge present. There was an obvious eagerness to learn that hung in the air, and learn we did. Over 700 professionals specializing in areas like occupational health, disability management, FMLA/ADA, claims management, HR and more gathered to share best practices and experiences. The resulting 40+ educational presentations and workshops did not disappoint.

Spring attends and sponsors a range of events throughout any given year. After each one, we take the time to reflect on key takeaways and then share them with our peers (like you!).

The name of the game in Austin this year was inclusivity. Here are five featured topics that explain why.

  1. “Impactful Diversity and Inclusion Strategies for the Workplace”

    This session highlighted the importance of workplace diversity and the trend towards it as a corporate goal. The presenter walked the audience through the different types of diversity, including the more obvious such as race, sexual orientation and gender, as well as the areas of diversity often over-looked: veteran status, education, tenure, full-time vs. part-time status, etc. We learned that these different demographics may have varying degrees of stress, pain, or health issues based on that one facet alone. Generational differences in things like returning to work and communications tendencies and preferences were also discussed.

  1. “Neurodiversity: Driving Innovation from Unexpected Places”

    A small team from EY led this discussion around neurodiversity, which is not a term you hear every day. The session focused on the importance of including autistic employees and understanding their specific needs from an employer. A shockingly low 32% of autistic adults are engaged in some form of paid work, a statistic which needs upward improvement.

  1. “Tools, Techniques, and Technologies for Creative Inclusive Workplaces”employee disability

    Anne Hirsh and Deb Dagit started out this presentation by opening the audience’s eyes to “Five Signs of Inclusion”: ethos, public relations/marketing, policies and practice, physical accessibility, and technical accessibility. They then walked through several tools and platforms that can help employers exhibit all five signs of inclusion.

  2. “Disability and Fitness for Duty in Transgender Employees”

    Brian Hurley, a medical doctor and expert in addiction and mental health, led an interesting session that educated attendees on sex development, gender identity, gender expression, sexual orientation, and gender dysphoria. He helped raised awareness around issues in the workplace, citing that 90% of transgenders surveyed reported experiencing harassment at work, and ended with an outline of model employer practices pertaining to transgender employees.

  3. “Get Explicit About Implicit Bias Using Compassionate Dialogue”

    In this presentation, more indirectly related to inclusivity as some others, a woman led an interactive discussion around implicit biases and the fact that we all have them. These are involuntary, inherent attitudes and stereotypes that we may not know we have. This of course can be problematic in the workplace, so audiences were given “debiasing” techniques to prohibit their implicit biases from interfering in fair and compliant practices.

absence managementWith over three full days of educational presentations, there were plenty of other hot topics such as mental health, return-to-work strategies, FMLA and ADA issues, and data and technology trends. The Spring team partnered with clients to present “Implementation Done Right”, where they highlighted best practices and tips for top-notch absence management programs.

All in all, the event was a valuable learning experience. But it wasn’t all business – we hosted an “extracurricular” activity at a local Austin brewery to relax and mix things up, and there were all sorts of networking opportunities throughout. We are already looking forward to next year’s conference.