Boston-based Spring Consulting Group (Spring) has been working with captives since its inception in 2004, with team members whose captive experience dates back to the 1990s.
Spring provides consulting and actuarial services, with a focus on property and casualty and employee benefits programs.
When it comes to captives, Spring works both to establish new programs as well as optimise existing ones. For employers who are just joining the captive world, Spring facilitates feasibility studies to assess the best structure and coverages for the client, as well as the most optimal domicile(s) and vendor partners. Auto insurance, workers’ compensation, property and casualty and medical stop-loss insurance are the most common lines for those organisations starting out with a captive for the first time.
Many of Spring’s clients, on the other hand, are well-established in the captive sphere, and turn to the firm for captive and risk optimization, including risk correlation assessments, so that they can better understand the impact new lines will have on their risk exposures and their overall insurance-writing capacity. The Spring team helps clients answer the following questions:
- Are you able to save more by retaining underwriting income and investment income?
- Has the organization’s risk profile changed?
- Can you add stability to your captives’ annual experience?
- Has claim experience been better or worse than originally expected? Do captive coverages need to be repriced?
Throughout this process, new and emerging risks such as cyber are considered for inclusion, and regulations like Dodd Frank and recent case law are examined to ensure the captive is still compliant. For example, Spring recently helped a large employer launch a centralised employee benefits program using a captive, taking into account the different regional regulations and expectations across its over 50 country locations.
Such services are invaluable to clients given the amount of work involved in maximising a captive’s effectiveness. “We advise our clients to take a fresh look at their arrangements around once every five years,” said Karin Landry, Spring’s managing partner. “They need to take a holistic look as well as go through line by line.”
Landry feels privileged to be part of the captive industry. “It is such interesting work, helping set up a company and watching it grow,” she said. “We are constantly putting our problem solving skills to use, and we have the satisfaction of knowing that we are adding value.”
The ever-evolving legal and regulatory environment in which clients operate, and the backdrop of technological innovation means that Spring’s work is varied and dynamic. The team is remarkably attuned to shifts in market trends, performance and legislation, so as to deliver only the best to its clients.
Spring’s independence and objectivity, as well as the quality of its staff, enable the firm to stand out from competitors. Most of Spring’s staff have ICCIE accreditation and have arrived at the company as the culmination of very different journeys that have taken them through a range of different professional experiences, from legal and actuarial to insurance and finance.
Landry is convinced the future is bright for the industry. “The captive market is growing because captives work. People who launch them see results and so they grow with new lines,” she said. This has been true for years, while a softer market has prevailed, but with the market now hardening it is an especially exciting time to be involved with captives, and business looks set to grow further.
While most larger US companies already have a captive, limiting the scope for growth there, Landry expects to see larger programs migrate towards higher retention levels, with less supply coming from the commercial market.
Karin Landry is a managing partner at Spring Consulting Group. She can be contacted at: Karin.Landry@springgroup.com
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