North Carolina is hoping to to grow its captive industry by encouraging more of its local agriculture forms to set up captives in the state.
Tom Adams, president and chief executive officer of the North Carolina Captive Insurance Association, noted there are a lot of mid-size agriculture companies in North Carolina, with around 50 percent of the state’s GDP derived from that sector.
“Captives have not gained that much traction in that sector to date,” Adams told Captive International. “I think that could be a real area of growth for captives in North Carolina going forward, in both larger captives and micro captives.”
The other great area for potential growth in North Carolina is from captives redomiciling, said Adams. “There is potential for captive growth among larger companies that already have captives, often offshore, that want to bring them home,” he said.
He added: “North Carolina has worked hard to ensure the industry is treated fairly with our offering and courteously by our regulators, and has made the process easy for captives to redomicile here. That should drive premium growth.”
Adams also characterised the competition between US states looking to grow their captive industries as “friendly”, arguing it is good news for the industry that companies have so many attractive options when looking at where to launch captives.
Adams said: “Ultimately we are all working towards the same end, which is encouraging the development of captive insurance companies. Each state puts its own spin on it, the legislation is a little different in each, meaning different states will appeal to different companies. But we all want to see the industry as a whole succeed.”
He dismissed the possibility that competition to attract captives might create a regulatory race-to-the-bottom. “Every state recognises that captives need to be regulated,” said Adams. “And no legislature is going to bring forward legislation that is going to allow captives to engage in harmful practices in their state.”
Adams also admitted one of the biggest challenges facing his state’s captive industry, and the captive industry as a whole, is appealing to a new generation of young people starting out their careers.
He said: “This is a niche industry and the most talented youngsters are highly sought out, they are hot commodities. The captive industry needs to figure out how to get from being niche to being mainstream, so it can raise its profile with these kinds of candidates.”
Tom Adams, North Carolina Captive Insurance Association, Agriculture