We are off the heels of another great Captive Insurance Companies Association (CICA) annual conference. This year, I was happy to escape Boston’s cold and head to Tucson, Arizona from March 10th-12th for a few days learning, networking, and as you see here, some impromptu sight-seeing. This was Spring’s 12th year attending and being involved with the CICA event, and I wanted to share what we view as the key takeaways and over-arching theme of the conference: preparing for the future – captives and otherwise.
It’s true what they say, that you can’t figure out where you’re going if you don’t understand where you’ve been. So before we dive into the future-focused learnings of CICA 2019, we can set the stage with “Captive History: Lessons Learned Through the Years”, where a panel of “Michaels” led the audience on a trip down memory lane. They started with the 1920’s, brought us to the first captive in 1950s, and landed where we are now, with over 6,000 captives in existence worldwide. They covered key lessons learned from factors such as:
- Corporate globalization
- Domicile specialization
- Access to internet
A number of sessions around regulatory and tax updates help illustrate the current captive landscape, such as “Regulatory Hot Topics”, “Captive Tax Developments – What They Are and What They Mean”, and “Addressing the Extra-Domicile Regulatory and Premium Tax Risks”.
Now that we’ve addressed the past and present, I believe the true emphasis at CICA this year was the future. Here are all the ways in which this theme came into play.
The Next Generation
The captive industry has a range of talent thought leaders and experts, but a fair amount of attention went to making sure the next generation is prepared to take over.
- In “Shaping the Captive Leaders of the Future”, Courtney Claflin of the University of California and John Prescott of Johnson Lambert highlight the importance of recognizing an aging workforce and reacting accordingly. Among other advice, they recommended campus recruiting, internship programs, emerging leader programs, and data and technology as recruiting methods.
- During “Succession Planning: Has Your Company Begun?”, a panel offered training and development best practices as well as on-boarding and transition guidelines.
- “Keys to Succeeding as a Young Professional in the Captive Industry: Mentorship” was another discussion centered around bolstering the younger workforce demographic for not only successful careers, but for a strong industry as well.
- CICA has always been focused on education, so it’s no surprise that students had a seat at the table at the conference. Specifically, one session spoke to bridging the gap between the classroom and the office environment, while another served as a spotlight on Butler University’s student-run captive.
The Geo-Political Landscape
The captive industry, and the insurance industry at large, are among those that can be most impacted by changes in the political and/or environmental climates. Thus, in speaking about the future, these areas were important to reflect upon.
- A session led by Jason Flaxbeard, Jim Bulkowski and Eric Bishop spoke to changes in US tax reform, technology, corporate governance, cyber and more to emphasize the dynamics at play. They then speculated whether these new risks can be seen as an advantage, a danger, or both for captives.
- During “The Political Climate and the Future of Captives”, the audience was led through some “Hotspots of 2019”, such as Brexit, the substance requirement for captives, and Association Health Plans. For each scenario, they outlined key lessons to be taken by captive and risk professionals.
If we as an industry can’t continue to innovate as the industries around us do, I don’t need to tell you that the outcome won’t be great. The following topics shed light on how captives can adopt creative strategies for future growth.
- Spring’s Managing Partner, Karin Landry, led a panel discussion on the opportunities for integrating workers’ compensation and disability through a captive. This is an emerging trend which we see larger employers moving toward, and the session offered strategical advice and case studies revealing tangible results of an integrated approach.
- One Captives 101 session spoke to captives themselves as vehicles of innovation, stressing their importance for a stable and blossoming organization.
- Andrew Rennick and Ryan Ralston presented innovative solutions for micro-captives, which have recently taken some press hits. Enterprise Risks, Extended Warranties and Product Recalls were some of the use cases they went through.
- We can’t talk about the future and captives without mentioning cyber, can we? One session reviewed an AM Best and Guidewire Cyence Report to educate the audience on breach expenses, cyber market growth, and modeled carrier portfolios.
- Speaking of topics trending in the industry, Steve McElhiney of EWI Re spoke to blockchain technology and its ties to captives through a case study. He listed several potential captive blockchain examples, such as exposure management, medical captives, and RRGs.
All in all, the conference was certainly valuable for industry professionals of all types and levels of experience. Myself and the rest of the Spring team are already looking forward to next year’s event, and putting these recent learnings to work!
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