Tulip-mania

tulipsAccording to recent news reports, the sharp sell-off that gripped cryptocurrency markets this past Wednesday has extended into a second day, with major digital assets across the spectrum continuing to fall during trading on Thursday.  The slump was then exacerbated by a Business Insider report that Goldman Sachs has put plans to launch a bitcoin trading desk on hold for the foreseeable future. But really one only has to look to speculative bubbles throughout history not to be surprised by the news.

Back in the early 1600s there was another investment scheme that just couldn’t lose: tulips. Tulip mania was a period in the Dutch Golden Age during which contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels and then dramatically collapsed, and is generally considered the first recorded speculative bubble.  At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled crafts worker. As prices drastically collapsed over the course of a week, many tulip holders instantly went bankrupt.

I think cyber currencies will play an increasing role in our financial and economic system over the course of the next decade. However, a little caution may be in order before deciding to place your captive assets in such a vehicle! In November 2013 Nout Wellink, former president of the Dutch Central Bank, described Bitcoin as “worse than the tulip mania,” adding, “At least then you got a tulip, now you get nothing.”

Thank you all very much, and I look forward to hearing from you.

Rich Smith
VCIA President

It was a sizzling conference!

2018collagefinalThanks to all who joined us in Burlington, Vermont, earlier this month for another great VCIA captive insurance conference.  More than 85% of conference survey responses rated our conference the best or better than most. With over 1000 attendees from 44 States and 9 countries, where more than 25% were captive owners, our annual gathering in August has grown to be THE captive insurance forum!

The conference had great energy – people liked the fresh format changes and extra touches, and, as one attendee stated the conference is “the best congregation of the captive industry in the U.S.” while another stated it was “the perfect environment for meeting the alternative risk and captive community”.  Many thanks to our sponsors and exhibitors without whom we could not put on such an event, as well as to the hundreds of volunteers who make it happen.

Now after a little break, we are back to work again looking out for the captive industry. We have a bunch of webinars being planned for the rest of the year, including Regulatory Compliance on September 20th, Captive Benchmarking on October 17th, State of the Union for Captives on November 15th with Dave Provost, Jim McIntyre and me summarizing all things legislatively current, and our annual Captive Taxation Update webinar on December 13th so keep your eyes on our website!

Thank you all very much, and I look forward to hearing from you.

Rich Smith
VCIA President

It’s Conference Time!

Just a quick post to say I hope I will see you all next week in beautiful Burlington, Vermont for our Annual Conference.  If all our previous blogs, emails and calls didn’t convince you to register yet perhaps this photo will:

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It’s always sunny in Burlington!

Thank you and I look forward to seeing you next week!

Richard Smith
VCIA President

I Will Friend You…

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Let’s not beat around the bush: VCIA’s annual captive insurance conference is right around the corner (next week!) and I hired a firm that shall remain nameless {Cambridge Analytica} to worm my way into your Facebook account and send you subliminal messages to register today.

I am doing this for your own good. Our conference is an extraordinary opportunity to collaborate with captive professionals from around the world, as well as earn credits and enhance your knowledge of how to operate your business.  Two great keynote speakers including Jack Uldrich, renowned global futurist and Joel Cohen, writer and producer of ‘The Simpsons’, will be presenting next week.

And, in line with your inability to stop my intrusion into your Facebook accounts, we have a number of future oriented sessions on matters such as blockchain, Artificial Intelligence, and drones.  And at our conference technology is being used more than ever, for a more interactive conference experience: great conference app with an activity feed, electronic polling during the sessions, Social Q & A for every session (Social Q&A is a way for the audience to share questions with the presenters and ‘vote’ for questions so that the content of the session becomes more customized). Plus, we want to get you young professionals here so we specifically developed professional development sessions to keep your career invigorated, plus a Young Professionals Forum (I hear they think Facebook is so yesterday…).

Don’t make me take over your LinkedIn account as well! Click here to register today.

Thank you and I look forward to seeing you August 7 – 9!

Time’s a Tickin’

 

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Hey, you! Yes, you! If you haven’t registered for the World’s Best Captive Conference™ yet, it’s time to get to it!  The Early Bird Rates for VCIA’s Annual Captive Conference expire this Saturday, June 30 and we don’t want you to miss out on the savings.

Top 10 Reasons to Come to VCIA!   Register Now!

  1. The VCIA conference is a great source forcaptive career development and networking; earn CPE / CLE / ICCIE credit
  2. We offer sessions with focus areas for those new to captive insurance, those in accounting / finance, operations, and risk management. Professional development sessions are offered as well. Sessions are interactive and fun.
  3. Nearly 100 companies exhibit at the conference, featuring the newest industry product and service developments.
  4. The event will have two excellent keynote speakersJack Uldrich is a renowned Global Futurist and award winning author; he will speak on trends transforming tomorrow. Joel Cohen is an Emmy award winning writer and producer for “The Simpsons.”  He is a hilarious speaker and will discuss the Simpsons, creative process, group dynamics & innovation.
  5. Risk management tour for captive owners. Captive owners are welcome on a special outing to tour Green Mountain Power, Vermont’s largest utility, and hear from their Risk Managers.
  6. Panelists who are captive owners from some of the most prestigious organizations in the world teach at VCIA. All the industry’s key players will be at the VCIA Conference!
  7. For attendees guests or spouse, there is a fun Vermont outing available.
  8. Global collaborationmake connections with professionals in all areas of captive insurance!
  9. VCIA is great for those new to the industry, or long-time participants. Educational offerings for all levels.
  10. VCIA is a great opportunity to relax, learn and have fun with industry peers!

So get on it! We look forward to seeing you in Vermont in August.
Thank you all very much!

Rich Smith
VCIA President

Actuaries and Hang-gliding!

Senior businessman laughing at office meeting

Two of my favorite jokes about actuaries are:

  1. An actuary, an underwriter, and an insurance salesperson are riding in a car. The salesperson has his foot on the gas, the underwriter has his foot on the brake, and the actuary is looking out the back window telling them where to go; and
  2. Two actuaries are duck hunting. They see a duck in the air and they both shoot. The first actuary’s shot is 20 feet wide to the left. The second actuary’s shot is 20 feet wide to the right. The actuaries give each other high fives, because on average they shot it.

Funny? Well, a little bit any way. Actuaries kind of get a raw deal as being so geeky and numbers orientated that they have trouble fitting into polite company. But I don’t find that true, for the most part.  I did have an actuary friend of mine tell me in all seriousness that he dreams in numbers – really!

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Here’s where the hang-gliding comes in: we have a number of the best actuaries in the captive business speaking at our upcoming annual conference with the RRG risk management officer for the US Hang Gliding and Paragliding Association. It’s shaping up to be one of our most popular conference sessions and is sure to be fascinating.

Recreation Risk Retention Group (RRRG) was created in 2016 to insure the unique risks faced by the hang gliding and paragliding industry. Tim Herr has over 30 years experience as a transactional and trial attorney in both state and federal courts and has represented the United States Hang Gliding and Paragliding Association for almost 30 years.

Joining Tim at our session entitled Innovative Spotlight: Financing Unique Risk will be Bob Gagliardi, head of AIG’s captive management and US Fronting operations, and Rob Walling, Principal and Consulting Actuary with Pinnacle Actuarial Resources, Inc. Behind the scene we have Mike Meehan from Milliman and Aaron Hildebrandt from Pinnacle providing their guidance and actuarial expertise.

This session explores the process RRRG went through to add unique risks to their program and will include details of the expected and unexpected obstacles encountered in adding the unique coverage, and how the obstacles were overcome.   And here is the kicker that should grab your attention: actuarial considerations will be covered! So come and join us, learn something, and laugh a little…

OK, last joke: How much is two plus two? A marketing VP will say “22”. An accountant will say “4.00”. A mathematician will say “I can demonstrate it equals 4 with the following proof … ” An actuary will ask “What do you want it to equal?”

Thank you and I look forward to seeing you August 7 – 9!

Rich Smith
VCIA President

More Headwinds Than Tailwinds

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Swiss Re’s 2018 SONAR report was just released which annually examines the emerging risks that the re/insurance industry and society are facing today. There have been shifts since last year and some things are not too surprising, but some that came to the forefront are more so.  Many of these emerging risks will be addressed at VCIA’s Annual Conference this August 7th–9th.

Of the top five Swiss Re highlighted, emerging geopolitical risk is a growing concern. Risk managers must be ready to adapt to the possible turmoil in financial markets as power drifts to Asia, democratic influences decline and the relevance of global governance institutions erodes. Additionally, the possible erosion of legal rules could threaten the ability to run global businesses.  Combined with the loss of risk diversification and the free flow of capital key to running a global re/insurance business, awareness and flexibility in our industry is paramount. Growing national protectionism and regulatory fragmentation jeopardize the benefits of the international diversification that our industry, and economy, has been built on over the past 50 years.

In the education session at our conference called Economic Headwinds and Tailwinds Impacting Captives, participants will learn about the health of the economy, macroeconomic themes, global monetary policy, the path of central bank policy and the overall direction of interest rates. Special panelist Jeff Carr, President & Senior Economist at Economic & Policy Resources, will lead the discussion. Jeff has more than 35 years of experience in economic analysis, economic and fiscal impact assessment analysis, and economic forecasting. He has served as the consulting State Economist and Principal Tax Revenues Analyst-Forecaster for the past six Governors of Vermont including the current Governor Philip B. Scott.

Also in the Swiss Re report, was the emerging threat of an increasing number of business processes driven by algorithms. Algorithmic applications are not infallible since they base their actions on human judgement as well. Discriminatory bias may also translate into defective modelling and prediction, bringing a two-fold risk to insurance and other industries.

A panel of consultants who work in this space will discuss the growing role of machine learning and analytics in all aspects of insurance business: underwriting, claims, and importantly, displacement and relocation of the risks themselves at our session entitled The Cognitive Captive: Artificial Intelligence for Smarter Insurance.  Questions discussed include: How does this affect insurable risks? How have insurance products changed to cope with these emerging technologies? How are insurance companies using artificial intelligence and predictive analytics to improve underwriting results or create a safer workplace? What coverage gaps are being created by the dislocation of risks, or a growing ambiguity about liability for losses caused by software? And how might your captive serve as a problem solver for these market failures? It will be a mind-bendingly fun hour of discussion on topics ranging from self-driving cars to bankruptcy predictions and more.

We look forward to seeing you in Vermont in August. Thank you all very much!

Rich Smith
VCIA President