26 June 2024ArticleAnalysis

Captive insurance growth and innovation: A conversation with Kevin Mead

Captive International sat down with Kevin Mead, the president of the Vermont Captive Insurance Association (VCIA), to discuss what’s keeping Vermont at the forefront of the captive insurance industry before the VCIA’s annual conference in Burlington.

What will the main topics be for VCIA this year?

For us, it’s all about the expansion of the captive insurance world and new and different risks going in to existing captives, as well as new formations in unique sectors. We’re focused on the combination of new captives and the expansion of current captives. The expansion isn’t related just to business operations—it also involves owners deciding to add new tranches of risk to existing captives, using them as proxy vehicles.

What’s been driving this expansion of interest in captives?

At a macro level, it’s driven by a growing economy, particularly in the US. We’re also experiencing a prolonged hard market in insurance, making it tough to obtain or renew commercial coverage. Additionally, captives are no longer seen as esoteric; they’ve become a more established tool in risk management, drawing interest from organisations that were previously risk-averse to new strategies.

As captives become more popular, there’s more talk of captives and realisation of their key advantages in the current economic situation and hard market.

Yes, there is. While I don’t have hard data, a simple search shows captive insurance is increasingly discussed in articles, conventions, and conferences outside its traditional realm, indicating that it’s becoming more mainstream. Like artificial intelligence (AI), once the domain of a few enthusiasts, it’s now widely used and recognised.

How is Vermont staying at the forefront of this market?

Our size and ability to quickly react to organisational needs are key. The Department of Financial Regulation has over 30 regulators, and they’re highly respected, contributing to our growth. Vermont’s stable and safe choice reputation, combined with outreach efforts from the VCIA and the Department of Economic Development, helps maintain our leadership. We’ve done roadshows, such as the upcoming one in Philadelphia, to promote captive insurance and engage with the community.

“We’re focused on the combination of new captives and the expansion of current captives.” Kevin Mead, VCIA

How important is it to keep recruiting in universities and addressing talent retention?

It’s essential. Many professions, including ours, face a decline in interest from college graduates. We’re working to make captive insurance a recognised and attractive career option. Initiatives such as the VCIA’s Emerging Leaders initiative aim to inform and engage students, ensuring a future workforce for the industry.

Is there increased competition in recruitment?

Yes, definitely. We’re all raising our game. For instance, starting salaries for new graduates are quite competitive. Captive firms must offer attractive packages to compete, whether in salary, benefits, or quality of life.

Are there any other highlights about the VCIA and Vermont?

The board is embarking on a strategic planning exercise to define our future direction. We’re seeking extensive input through surveys, interviews, and listening sessions, culminating in a strategic retreat in October to develop and resource a strategic plan.

For the 2024 VCIA conference, we’re shifting to a Monday through Wednesday schedule, starting with substantive events on Monday. Highlights include Sandy Bigglestone’s presentation on Vermont’s regulatory state and various educational and social activities, such as a Habitat for Humanity volunteer event, yoga sessions, and an LGBTQ and allies after-party. 

These additions aim to enhance the overall conference experience, blending education with community engagement.

Registration for the VCIA’s 2024 conference closes on June 30. Click here for more information.