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3 March 2024Analysis

Keeping the captive community connected

Dan Towle, president of the Captive Insurance Companies Association, congratulates Captive International on its 20th birthday and highlights the role of the association for the sector’s future growth and success.

"Captives have saved their organisations $9.4 billion over the past five years." Dan Towle

Congratulations to Captive International on 20 years of sharing captive industry news and helping us stay connected! Part of what makes our industry great is a sense of community and a willingness among captive insurance colleagues to help each other and share best practices. Thank you for being a part of that community.

Over the past 20 years we have navigated through hard and soft market cycles and captive insurance has increasingly proven its business purpose and value. Today the captives sector can no longer be referred to as the alternative market. The captive industry is thriving, with more than $100 billion in premiums written through captives domiciled in the US alone, according to 2022 market studies.

AM Best reported in August 2023 that for captives receiving their ratings, with the continued growth in captive surplus and dividends, it is estimated captives have saved their organisations $9.4 billion over the past five years.

Another aspect of our market growth is the emergence of new captive insurance domiciles worldwide. It is encouraging to see France enter the marketplace and to see interest from Germany, Italy, Spain and the UK. This clearly signals the growing understanding of the value of captive insurance. It also signifies the acceptance by these countries’ governments of the validity and valuable business purposes of captive insurance.

Engaging tomorrow’s leaders

More recently we are seeing continued interest from private equity firms regarding making investments in captive management and other areas of the captive insurance industry. This is giving needed capital for organisations to grow and the money to pay higher-than-average wages to hire
key people.

We are an ageing industry and retirements are creating new advancement opportunities. With the increased wage pressure and higher demand for qualified individuals, I expect to see even more people on the move.

While this will cause some short-term pain, ultimately this may be a good thing for the industry, in that positive wage pressures will ultimately help our sector attract top talent. If the captive insurance industry’s reputation is as a high-paying sector, it will be easier to attract talent.

We will need to hire more young professionals with diverse skillsets to keep up with industry growth. This is one of the important reasons the Captive Insurance Companies Association (CICA) launched its NEXTGen and Amplify Women initiatives which provides opportunities for young professionals to network and gain valuable skills to help them prepare to advance when opportunities arise.

Strengthening education and international relationships

As the captive insurance industry grew so did the need for best practices. CICA has long championed best practices and is proud to have the International Center for Captive Insurance Education (ICCIE) as an education partner providing foundational education and certifications.

CICA’s domicile-neutral international conference has become a significant gathering for the industry, bringing together experts and captive owners to share the latest innovative strategies to address today’s challenging market and tackle future risks.

Growing the industry

It is easy to get excited about the wonderful growth we are seeing in the marketplace, but we must never lose sight of ongoing threats. As our industry grows, we become a larger target for people and entities that don’t understand what captive insurance is and the benefits it provides for companies to better manage their risk.

Despite our success, we cannot rest on our laurels. We need to continue to be diligent and consistently educate, lobby and defend the use of captives for better risk management and financial efficiency.

Partnerships and international relationships have been a vital part of fostering captive industry growth and protecting the sector. CICA has been proud to partner with the European Captive Insurance and Reinsurance Owners’ Association to
host the biannual European Captive Forum and to provide comments and develop guidance for the Organization for Economic Co-operation and Development.

Meeting industry needs

CICA is excited about our growing captive community—we recorded our highest-ever membership in 2023. We are pleased to be able to bring together representatives from across the industry to provide the highly valued networking, news and education our members need to enhance their captive insurance strategies. l

Dan Towle is the president of CICA. For more information visit: www.cicaworld.com