14 October 2013

Proximity and quality key to Connecticut’s success

Geographic considerations and the search for a quality and committed captive domicile have helped Connecticut attract the state’s third captive, Red Apple.

That is the news from Thomas Hodson, president of the Connecticut Captive Insurance Association, who said that the state’s “unparalleled insurance expertise”, knowledgeable regulatory environment and convenient geographical location will help drive formations in the state’s growing captive sector.

Red Apple, which operates Gristedes Foods and Red Apple gas stations, announced its decision to domesticate in Connecticut earlier this week, and Hodson was confident that other US firms will consider the merits of Connecticut closely.

“Insurance is the number one industry in Connecticut and as such the state has an incredible number of service providers and insurance expertise concentrated in one place.” Its small, but growing, captive industry is able to draw on this commercial expertise as the state builds a niche for itself in the captive sector, said Hodson.

“Connecticut has more insurance-based intellectual capital than any other state in the US” he said, with captives able to benefit from the transfer of skills and talent from the commercial sector as the state builds its captive position.

Hodson said that the state’s captive sector also benefits from the unqualified support of the governor, the legislature and an experienced regulator. “Governor Malloy recognises the importance of insurance to Connecticut, while in John Thomson the state has an insurance regulator and industry veteran who can bring real experience to the position”.

Gone are the days of golf and skiiing

The state’s geographical position is also playing its part in encouraging firms to consider Connecticut, said Hodson. “Gone are the days when golf or skiing—Bermuda or Vermont—were behind the domicile decision. Nowadays, nice vacations are less important than the bottom-line.”

Captive owners are looking for domiciles close to home with real regulatory depth and insurance expertise. For many, Connecticut may just fit the bill, said Hodson. More than thirty Fortune 1000 companies are headquartered in the state and 13 percent of the total population of the US, along with 1/3 of the countries income and 18% of advance degree holders, lives and works within 200 miles of Hartford. It is apparent that there is significant opportunity to attract local interest.

Hodson said he anticipates “steady growth” going forward, adding that Connecticut also is exploring the potential of developing a niche within the sector, one that will inevitably draw upon its strengths in commercial insurance and convenient geographical location.