24 April 2023ArticleAnalysis

Seeking the next generation

Talent recruitment remains an issue that worries many in the top echelons of the captive insurance industry, as the Great Resignation (or in places the Great Retirement) continues to affect many companies across the world of insurance.

As Captive International reported earlier this year from the Captive Insurance Companies Association (CICA) meeting, the steady trickle of talent out of the market is a frequent topic of conversation at industry events.

Does the industry need to find new ways of recruiting talent? A number of influential executives think so.

Philip Giles, managing director of MSL Captive Solutions, said that there is a real need for urgency on this matter.

“More than 50 percent of captive industry practitioners are set to retire within the next 10 years,” Giles pointed out to Captive International. “This creates an immense need and opportunity for good young professionals to enter the industry and quickly advance both professionally and economically.”

Giles underlined the fact that the captives sector has been among the fastest-growing segments in the insurance industry. Captives operate in just about every traditional coverage segment of the industry: property, casualty, accident and health.

“One of the main functions of a captive is to deliver insurance capacity more efficiently than in traditional insurance markets where coverage is unavailable or inordinately expensive,” Giles said. “This opens the door to coverage ingenuity and creativity.”

Anjanette Fowler, managing director and senior vice president, Insurance & Specialised Industries Group at PNC Institutional Asset Management, told Captive International that although strides are being made to bring awareness of the vast opportunities in the captives industry, there is a persistent perception that it is “old and boring.”

Holding events at conferences, such as CICA has organised with its NextGen and Amplify Women initiatives, dedicated Happy Hours events and networking opportunities, has opened the eyes of young talent to the fact that there are others out there in the insurance industry who they can connect with and relate to, Fowler told Captive International.

“There is however a need to go bigger in educating the graduating talent pool, for example that a career in captives encompasses those with marketing, accounting, finance, law, and general business degrees given the broad spectrum of service provider work involved in establishing and managing a captive entity,” Fowler added.

“And going beyond those focused degrees, I know we have some very successful and talented individuals in our industry who come from teaching or other non-business focused backgrounds. It’s an exercise in letting folks know that it’s a dynamic and fun space to work in.”

William Thomas-Ferrand, international practice leader of Marsh Captive Solutions, said that new talent has to be found, especially now that captives are such a recognised solution to many risk financing challenges.

And Sandy Bigglestone, deputy commissioner of the Captive Insurance Division of the Vermont Department of Financial Regulation, said that new and creative ways of recruiting talent could have a tremendous impact, adding that collective efforts, even duplicative efforts in various geographic areas aimed at the same purpose, will help.

Get them young

One area highlighted to Captive International by the executives was college recruitment and the need to get applicants straight from the universities.

Fowler said that she does not believe that students understand what the captive insurance industry can offer. She said that it would be important to get them to see what the captive space has to offer while they are still in college. As she pointed out, associations such as CICA, WRCIC and others are doing this by allowing students to attend their annual conferences at little to no cost. In addition, CICA has its student essay contest.

“All these are examples of ways we are trying to broaden perspectives and share with young people the career path that the captive insurance industry has to offer,” said Fowler. She thinks that the graduate outreach programmes that are in place in some locations don’t go quite far enough yet, but she believes that some progress is being made, with awareness programmes, associations, scholarships such as that supported by Hylant, and outreach initiatives such as the ones that CICA’s Amplify Women is currently focused on, in which seasoned captive professionals go to college campuses to speak and bring real life experience awareness to students.

Thomas-Ferrand said that he would like to see captives being a bigger part of the curriculum for finance/insurance courses, adding that captive managers should be interacting much more with universities/higher education facilities, especially when a university is close to a known captive domicile.

Giles went into some detail. His suspicion is that most university students are primarily taught the conventional insurance structures and don’t have enough awareness of the captive and alternative risk industry. Professionals with accounting, actuarial and financial backgrounds can enter the captive insurance industry quite easily because of the specific nature of the work.

For most other positions, Giles said that it’s good to spend time gaining base-level experience in more traditional segments of the commercial insurance industry. This will help foster a deeper understanding of specific lines of business and traditional insurance structures before moving on to specialise in alternative risk.

“As with any segment in the insurance industry, captives need to have both technical and non-technical staff,” Giles pointed out. “There is something that can appeal to just about any type of personality and satisfy any intellectual interest level. Technical pursuits generally include accounting, actuarial, underwriting, data analytics, and claims. Non-technical positions can vary but will probably focus more on business development, especially for group captives.”

Giles agrees that outreach initiatives have not been very strong or clear enough. As he explained, when he entered the insurance industry, formal, postgraduate corporate home office training programmes were the norm. However, those don’t seem to exist any more. New professionals need to be able to gather knowledge and learn on the fly.

“A good mentor is essential,” he stressed. “Current practitioners need to realise that as alternative risk professionals, we are stewards of the captives industry. We are each responsible for perpetuating continuous development, growth and evolution of our industry. Part of our promise to our clients and colleagues is to contribute our time and expertise to the betterment of this industry as a whole.

“Assertive recruitment and development of young professionals need to be an ongoing initiative throughout our industry.”