Challenges and opportunities
Leon Rives of RH CPAs, Captive International’s first Company of the Month, talks about the state of the market—and how RH CPAs is well-placed to thrive in challenging times.
Leon Rives is the chief visionary officer at North Carolina-based RH CPAs. In the second of a series of features on leading companies in the captive insurance world, Captive International spoke to Rives about the challenges and opportunities the captives sector is facing.
One of the primary issues is the difficulty in attracting talent to the industry, he said. The captive insurance sector is relatively obscure, making it challenging to draw in professionals such as captive managers, actuaries, accountants, and legal experts, he added. This talent shortage is not unique to this industry but remains a significant concern.
Another major issue is scrutiny from the Internal Revenue Service, which has been targeting certain captives. This scrutiny affects not only smaller captives but also larger ones, creating uncertainty and challenges within the industry. Additionally, there is a need to change the marketplace perception of how captives function, especially as they become more appealing to smaller and mid-sized businesses looking to manage risk internally.
Improving understanding among insurance brokers and retail level stakeholders is crucial for the industry’s growth in these sectors, Rives said.
Looking at the opening of new domiciles for captives in the US, Rives noted that several states have introduced captive legislation, motivated by the desire to retain premium tax dollars and stimulate local economies. States such as Connecticut and Oklahoma have become more prominent in the captive insurance space. Rives, however, questions the necessity for more domiciles, suggesting that the current number may be sufficient for the industry’s needs.
“Innovation remains a key aspect of the captive insurance market.” Leon Rives, RH CPAs
Leading the way
Innovation remains a key aspect of the captive insurance market, says Rives. The industry is often at the forefront of offering coverage for new and emerging risks that are not addressed by the commercial insurance market. For example, the cannabis industry and businesses affected by COVID-19 have turned to captives for coverage when traditional insurance was unavailable. This ability to innovate and provide solutions in niche markets is a significant strength of the captive insurance sector, he added.
Reflecting on the past year, Rives highlighted a 25 percent growth in his company, driven by its distinct approach and strong leadership. Looking ahead, the company expects continued growth, albeit with ongoing challenges in recruiting new talent. It plans to maintain its focus on five core values: responsiveness, dependability, teamwork, a can-do attitude, and thriving on being different.
These values are central to the firm’s strategy as it continues to navigate the evolving landscape of the captive insurance industry, Rives concluded.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
