FORTY under 40: Lawrence Kemp
Lawrence Kemp, Head–insurance division, Crowe Cayman
Originally from Scotland, Lawrence Kemp started his captive insurance career training with PwC in Guernsey as a financial services audit associate. After three years of working with PwC Guernsey, he transferred to the insurance team at PwC Cayman Islands. After 2.5 years working with PwC Cayman Islands he returned to Scotland, but the pull of warm weather and Caribbean beaches was too much, and he went back to the Cayman Islands within the year.
At the time Crowe Cayman was setting up and the partner (Neil Maynard) hired Kemp as the first on-Island employee.
Fast-forward six years and Crowe Cayman has significantly built its client basis and operations in the Cayman Islands. At the end of 2019, the office added an insolvency and restructuring division to supplement the insurance and asset management audit divisions. Today Kemp heads the insurance division at Crowe Cayman and he is charged with the day-to-day running of the team.
How did you become involved in captive insurance?
My career in captive insurance started with a favour for one of my friends at PwC Guernsey. While working in the asset management team, my friend was snowed under with several audit clients and asked if I could help out. That resulted in more and more captives being moved into my audit portfolio until finally captives formed most of my day-to-day job.
What are the biggest challenges of working in this industry, and what do you find most rewarding?
The biggest challenge is the recruitment of people with the right skills into the industry. As a niche industry, it doesn’t get the same exposure as investment banking or consulting services. I believe this is partly driven by the salary expectations and bonus structures that other industries tend to offer, compared to working in capital insurance.
As a result, strong graduate candidates for insurance management positions more than likely move into asset management where they are rewarded for their decision-making. It’s the common practice of rewarding people for extra money generated rather than money saved from an insurance programme.
The most rewarding thing for me is when I see my time invested into training and coaching start to come to fruition—when someone new to the industry applies what they’ve been taught, and it all clicks together. It’s not always a quick process but I tend to see in my team, that once one key point is understood, there’s a domino effect and all of a sudden, their understanding goes from 0 to 60 and they piece problems together to solve them.
Would you recommend the captive insurance industry to young people as a future career path?
“A better and more dynamic view would be to sell the captive insurance industry as an alternative risk management industry.”
When young people see the captive insurance industry the focus is on the insurance part of the title and the focus will be on the day-to-day, “necessary evil” types of insurance such as home, car, and vacation insurance. A better and more dynamic view would be to sell the captive insurance industry as an alternative risk management industry which helps focus on the exotic insurance products and more complex risk strategies than traditional connotations of the insurance industry.
I’d highly recommend using audit as an entry point into the industry as it helps build a greater understanding of the sector. Working in audit not only did I have to learn about the insurance industry, but I had to get up to speed on my client’s industry and the potential risks from their standpoint.
This helped give me a better understanding of various strategies and how they are used in different scenarios to solve problems. This taught me why certain things are done in certain ways, rather than just how to do things.
What developments do you see ahead for captives?
More insurtech, and also a creation of new risks associated with the increasing use of AI. AI is constantly improving as more and more data is fed into systems, but lack of data or misinformation could result in AI providing incorrect results which could result in financial loss to individuals.
New markets having new risks will result in more opportunities for the captive insurance industry.
Do you think your long-term future remains in the captives market?
I do see myself staying in the captives market, but I think the typical client will change dramatically. I’m already seeing a move from single parent captives, which are insuring either healthcare groups or operating companies, to captives being used as offshore reinsurers to support their own onshore insurance operations.
The types of products will change significantly. There will always be a need for the traditional workers’ compensation, general liability, and auto products. However, with more of the world becoming digital, this will create new risks and opportunities for the market. The best example would be cybersecurity, where until five years ago people were still trying to work out how to price and operate an insurance programme for cybersecurity risks. Now this is a standard line of business which lots of clients want to have.
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