Captives are driving innovation to a far greater extent than commercial insurers, according to Michael Maglaras, principal at Michael Maglaras and Company.
Speaking at the VCIA conference on Tuesday, Maglaras said his Connecticut-based captive to restore crumbling homes, the Connecticut Foundation Solutions Indemnity Company, was an example of a captive pushing innovation in a way commercial insurers are not.
“If a hurricane hits, a new Sandy, damaging thousands of homes, they should look at what we did in Connecticut, where captives achieved much more, and much cheaper, than the commercial insurance industry could have,” he said. “We should take pride in our innovation, and also learn from it.”
Panelists stressed that innovation is only possible by harnessing the data available to insurers, and analysing it, better than the industry has in the past.
James Pingel, vice president at Reiter Affiliated Companies, added that data can be used to manage losses and improve control. “But analysis not only reduces injuries, it also increases your efficiency,” he said, citing an example where the analysis of claims data for fingers injuries were reduced by developing a better design for the agricultural equipment causing those injuries.
Maglaras added that the use of third party administrators (TPA) can give captive owners access to more data than they would be able to obtain on their own, which can help them improve their businesses.
“Established TPAs, once hired, will share benchmarked data across the industry from their other captive clients. Captives are not good at sharing data. But these repositories can give you access to all the information you need,” he said.
Connecticut Foundation Solutions Indemnity Company, VCIA 2019 Annual Conference, Vermont Captive, Captive, commercial Insurance, Reinsurance, North America