No time for complacency, warns CICA president.
Businesses and captives must share their stories to increase public understanding of the industry, according to the president of the Captive Insurance Companies Association (CICA), the only domicile-neutral captive insurance association in the US.
Speaking at the organisation’s Fall Forum conference in Arizona taking place this week, Daniel Towle said that the captives industry had continued to “grow and thrive” during the last couple of years, despite the challenges of the pandemic.
“To many of you, that won’t be a surprise. Captives have always been the go-to for creative solutions to fill coverage gaps in the commercial market,” he told the audience.
While many industries had been hit hard, captives had seen “phenomenal growth”, he added, with some of its members recording their best ever years. However, he warned against complacency.
“[A]t the same time, captive insurance remains an industry that continues to be misunderstood,” he said. Federal and local tax authorities applying rules in new and unexpected ways was one symptom of this.
“As an organisation, we want predictability, and the not the uncertainty that you might have a tax liability,” he said. Public understanding, too, was low and he argued that the current growth in their use and captives’ increased profile should be used to address this.
“Captive insurance companies have an incredible opportunity right now to showcase their value to their parent companies and educate a broader audience about their value,” he said. “[We need] to showcase how captives are properly used to assist organisations during varying economic conditions and turbulent insurance markets.”
He concluded: “Captives have played an important role during this pandemic, and we all need to tell our stories.”