6 June 2024ArticleAnalysis

Changing of the guard: attracting new talent to fuel captive growth

Rapid growth and an ageing workforce threaten growing knowledge gaps as the captive insurance industry struggles to recruit the next generation of talent. To overcome the challenges, it must cast its net more widely, a Captive International panel agreed.

The ageing workforce is a challenge across the insurance industry. According to the US Bureau of Labor Statistics and consultant RSM, the insurance industry will lose around 400,000 workers through attrition by 2026. Close to half the industry is aged over 45. The number of employees over 65 outnumbers the under 25s by a third.

For the captive insurance industry, the challenge is arguably even more acute. First, the industry is seeing rapid growth. According to Marsh, premiums written by captives owned by North American-based parents increased 15 percent in just the two years to 2023. Those in Bermuda, the Cayman Islands, and Barbados also recorded double-digit growth.

Second, few people know about the industry. According to a panel of leading young professionals, the real knowledge gap threatening the industry is that too few understand the career opportunities it presents. Speaking to Captive International as part of our FORTY Under 40 initiative, the panel drew from leading young talent across the industry:

Prabal Lakhanpal, senior vice president at employee benefit consulting and actuarial services group Spring Consulting;

  • Kim Guerriero, principal and consulting actuary at actuarial and consulting firm Milliman;
  • Bailey Roese, a partner at law firm Dentons; and
  • Dylan Feringa, director and vice president in the Insurance & Specialized Industries Group at PNC Institutional Asset Management.

Together they discussed the industry’s challenges, and how it can ensure it attracts the talent it needs.

Watch the full panel discussion here;

“There are a lot more younger folks at almost all the conferences I go to.” Prabal Lakhanpal Spring Consulting

Ignorance and bliss

One thing they all agreed on is that the problem is not the work.

“From the first captive conference I attended, I was completely smitten with the industry,” explained Roese, a tax attorney who came to focus increasingly on captives after working on small captive audits.

“It is a very collaborative industry, which isn’t always my experience in the tax space. It’s nice to be able to use creativity and innovation to solve problems for companies and individuals.”

It was a similar story for Feringa. “What intrigued me was the creativity behind the structuring of these captive vehicles,” he said.

The issue is well illustrated by how he came to work in the industry. “Like many others, I kind of fell into it. It wasn’t intentional,” he said. It was the same for Lakhanpal.

Even Guerriero, whose mother worked in the industry, admits that widespread ignorance about captives is a significant barrier to recruiting young talent. “When you tell people you work in the captive insurance industry, most of them look like a deer in the headlights,” she said

“I would love to see the captives space partner with other professional organisations.”Kim Guerriero Milliman

“And when you say you’re an actuary, people don’t even want to ask.”

“It’s not a well-known industry among college students and young people starting out in their careers—even when they’re in the insurance world,” agreed Roese.

Things have improved, however. Just a decade ago, when Lakhanpal went to his first captive conferences, there were very few younger people. “When I look around the room today, one of the things I’m proud of as an industry is that we have filled some of the gaps. There are a lot more younger folks at almost all the conferences I go to,” he said. “That’s definitely feeding into filling the knowledge gap.”

Is it enough, though? Feringa thinks not.

“If we look at the wave of retirement anticipated in the next 10 years, the industry is not currently recruiting enough people to backfill the gap,” he said.

“It’s nice to be able to use creativity and innovation to solve problems.”Bailey Roese Dentons

Casting a wide net

Much of the solution, said Feringa, is simply for the industry to put itself out and get in front of schools and students—efforts that are already ongoing. All four panellists are involved with the Captive Insurance Companies Association’s (CICA) NEXTGEn initiative, launched in 2019 for young and new professionals to advise CICA on education and networking.

“We’re doing a lot of the right things,” said Lakhanpal. “The industry just has to keep plugging away.”

It could also leverage some of the efforts elsewhere. Guerriero, for instance, is involved with the Casualty Actuarial Society, which has made significant outreach efforts to colleges, universities and, more recently, high schools.

“I would love to see the captives space partner with other professional organisations,” she said.

Lakhanpal suggested a look at a wider range of potential candidates. “We need to be bringing in experts from various subject matters into the insurance space while simultaneously trying to build homegrown talent within the captives industry,” he said.

Crucially, that means there’s no age barrier. As the captives industry looks for talent, it should take a broad view, according to Feringa.

“It’s not just about young people. A brand new risk manager entering the space is the next generation of the captive insurance industry. Age does not preclude them.”

“The industry is not currently recruiting enough people to backfill the gap.”  Dylan Feringa PNC Institutional Asset Management

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