​Captives help provide future-ready solutions: Q&A with Dan Towle of CICA


​Captives help provide future-ready solutions: Q&A with Dan Towle of CICA

​With new technologies, new types of business and new risks to address, the captive insurance industry has more opportunities than ever before to shape the future, Dan Towle, president of the Captive Insurance Companies Association, tells Captive International.

“We need to show participants how they can use what they’re learning at the conference.”What is this year’s conference theme and the idea behind it?

Shaping the future’ reflects the powerful opportunity we have today, with new technologies, new types of business and new risks to address. Risk managers need to anticipate opportunities and collaborate to have the risk management solutions ready for future business needs. They also need a robust talent pool engaged in learning the captive insurance industry and developing strategies for optimal use of captives. 

Are there any particular sessions or topics you are excited about?

Our sessions cover a broad range of topics from innovative risk solutions to using blockchain technology and the latest tax updates. You’ll also see from our lineup that we are delivering on our commitment to help the industry attract, develop and retain future captive insurance leaders.

We’re excited to have three of our mentorship pairs sharing keys for young professionals to succeed in the captives industry. We have more college students involved and presenting at the conference, and our Professional Development Track continues to be popular.

Conference participants will see a much stronger international influence this year, with sessions focused on captives in the European market, responding to global political events and challenges and opportunities in Latin America. We are happy to be hosting our partner association, the European Captive Insurance and Reinsurance Owners’ Association (ECIROA).

How has the conference changed, and have the industry’s expectations of the event changed also?

CICA has always brought together the best intellectual capital in the world at our domicile-neutral conference. Our programme committee has done an exceptional job. We have more sessions and speakers than ever before, which will we think will attract an even broader audience. That broad audience and our domicile-neutral environment facilitates networking that leads to creative solutions in ways other conferences can’t offer.

As our theme indicates, we’re focused on “shaping” the future because we need to do more than share ideas and best practices. We need to show participants how they can use what they’re learning at the conference.

Most importantly, the conference is becoming a hub for knowledge transfer. By connecting students and young professionals with today’s industry leaders we’re not only creating excitement about captive insurance career opportunities, we are transferring knowledge to prepare the next generations of captives professionals. At the same time, seasoned veterans can learn from the young professionals.

What are your ambitions at CICA, and what initiatives is the association involved with in 2019?

1. To attract more new talent to the captive industry. Our Essay Contest finalists tell us they’re excited about being at the forefront of creating captive solutions for emerging risks. That’s a powerful marketing message, and we’re taking it to a wider audience, so we can raise awareness and create excitement about career opportunities in the captive insurance industry.

CICA has launched several initiatives that include making CICA membership benefits available to more industry professionals, and we have enhanced our partnerships with universities, and with the International Center for Captive Insurance Education; and developed programmes such as our Professional Development Track at the CICA Conference, our Mentorship Programme and our college student Essay Contest.

2. To expand our advocacy activities to champion the valuable role of captive insurance in today’s marketplace, where captives continue to face threats from being misunderstood. We’re increasing CICA’s involvement in Europe and Asia. We continue to collaborate with our partners at ECIROA and we are more involved with the Pan-Asia Risk and Insurance Management Association (PARIMA).

3. To continue to evolve our board and organisational leadership to align with our strategic goals such as working with universities and expanding our international focus.

4. To develop our partner relationships with other domicile associations. Through our work with these associations and the Captive Association Leadership Council, CICA is playing a larger role in coordinating our collaborative efforts in support of the captive insurance industry. We have strong relationships with many of our industry partners and we hope to continue to grow those relationships.

What are some of the more prevalent issues in the industry right now?

The captive insurance industry continues to be misunderstood, and this provides both challenges and opportunities. The challenges come from addressing increased scrutiny on several fronts, whether it is the Internal Revenue Service (IRS) here in the US or global impacts of the work of the Organization for Economic Cooperation and Development. In the US, the concern of regulatory overreach by home state regulators on captives domiciled in other jurisdictions is of very high concern. This is potentially the biggest threat the US industry may have in 2019.

CICA has taken a leadership role in increasing the understanding of the responsible and prudent use of captives and the importance of best practices. Earlier this year we released an important guidance document on risk pooling, “Commercial Insurance and Captive Insurance Industry Commonly Accepted Practices.”

Risk pools are important but their use is often misunderstood. As a result, recent high-profile cases such as Reserve Mechanical v Commissioner paint activities such as risk pooling with a negative brush that spills onto the commercial and captive insurance industries. We feel it’s important for a domicile-neutral organisation such as CICA to help explain the commonly accepted practices for creating and operating a risk pool.

How do you think the captive insurance market will evolve in 2019?

Formations continue, even during the ongoing soft market. This is happening at the same time we’re seeing a reduction in the US corporate tax rate, which has lessened any potential tax advantage that captives previously had.

Continued IRS scrutiny surrounding small captives has led to a slowdown in the growth of the small captive space. CICA has always advocated the formation and operation of captives for the right reasons, and we are known for our published statement “Do 831(b)s Right or Don’t Do Them at All.” This mantra applies to captives of all sizes, and if some captives are not doing them right, increased scrutiny of these captives might be good for our industry.

A clear majority of captives are formed and operated for risk management reasons. However, if some are formed for the wrong reasons, this hurts the entire industry and does not align with the values CICA has put forth.

CICA 2019, ​Captives, Dan Towle, Captive International, Risk Managers, technology, North America, Cayman Island

Captive International