Seize the day: options for growth
Is there still growth potential in the captive insurance market? Yes! Not just growth, but rapid growth. The industry has expanded exponentially which is derived from the education of business leaders. It is simple: as more business leaders learn about the benefits of captives they tell others, which in turn generates more interest. The value proposition of taking on more risk on your own balance sheet is attractive, especially in the hardening market.
Will the hard market continue? Yes, and it may be a long-term hard market. First there is rapid social and real inflation—as the cost of claims rises so then do insurance premiums. But more importantly, as business leaders are educated on the ability to retain risks in a captive as opposed to the commercial market, it presents an opportunity for good risks to be placed in a captive, while the commercial market is essentially adversely selected to hold bad risks, which drives premium increases in the ever-hardening commercial market.
However, there are challenges ahead for the market and a few things that we as an industry should address. First, a clear set of rules from the Internal Revenue Service (IRS), but I doubt that is coming soon. I also think that the growth we have seen across all domiciles is great, but we would like to see more regional collaboration similar to the Western Regional Conference.
More collaboration with the National Association of Insurance Commissioners would be beneficial—there should not be an antagonistic relationship but a cooperative one. These types of collaborations will not only help to educate prospective captive owners, but also provide a united front for the industry when combating the IRS.
Finally, the industry could do more to combat bad players and I think we could remove some long-standing stigma regarding captives. While no-one likes heavy regulation, consistent regulation to help weed out bad players only helps the industry.
A competitive advantage
What gives RH its competitive advantage? What makes our offering more attractive or unique is that people think accounting and taxes are boring, but we love it and have fun. It is exciting to deliver a “wow” concept to a prospective captive. We have been growing from industry support, by assisting captive managers in growing their businesses. which inherently grows ours.
There is no secret to our success. Our firm wins, our firm grows, our team grows, by sticking to our Five Core Values. We are personable, we like doing business with people we like, and people like doing business with accountants they like. We are dependable, we set clear expectations and strive to exceed them.
We are responsive, you can count on our teams responding to changes and issues in an expedient manner. We are team players, we care about one another, and all support one another.
We have a can-do attitude, we do not have a glass-half-full or glass-half-empty mindset—we make stuff happen and have fun while doing it!