First of all, the numbers. Both conferences had strong attendance, both up from 2022 levels, together with a full exhibit hall. Then secondly the content. As in 2022, almost all presenters were upbeat about their own captive, or, in the case of service providers, their pipeline of new and expanding clients. And then lastly, the “chatter.” A standard opening question of mine is, “how’s business” and this was almost invariably met with a plaintive request for more resources in terms of staff, because there is so much business to take on.
So how does this inform the VCIA as we develop our services to members? Some of the hotels for our own conference in August of this year are already approaching capacity, and this is before we even open registration in May! So, we are working with our partners in the Burlington lodging industry to secure additional rooms and even additional hotels to meet the expected high demand in a small marketplace. Then, addressing some of the workforce issues that I’ve heard, we are about to announce some strong new initiatives that will hopefully pay dividends in expanding the available workforce for the captive industry, especially in Vermont.
Lastly, it only remains for me to recognize March 17th, Lá Fhéile Pádraig sona daoibh, go athas sé lúcháir orainn go léir!
Mexico and Vermont. Aside from the glorious Cabot Habanero cheese (which likely has no content from Mexico!), the links might not be immediately apparent. But we are working on fixing that in the captive insurance space, and it started with VCIA’s triumphant Trade Mission to Mexico City, as our Vermont contingent established quality relationships with our Mexican counterparts that will last for years.
This week has been the most incredible and positive experience for the expansion of both the industry and Vermont as a domicile. I will be providing an in-depth debrief with our member-exclusive special report coming out in the near future, but for now, there are some major highlights that I want to share as we close our memorable visit.
The Roadshow: Many of you reading this may have either participated in or attended a roadshow, but this international one had a different flavor. Simultaneous translation being the most obvious distinction! Before a full room of about 100 attendees, panels and speakers not only reviewed the Vermont process for establishing a captive, but also covered Mexican tax and regulatory implications. The audience had a great many well-developed questions, and were clearly keen to explore both the background and the applicability to their own insurance challenges.
The meetings: Multiple meetings with trade associations, government entities and business groups revealed the appetite that there is for captives in Mexico. The desire is there and VCIA and Vermont have pledged our investment in figuring out how captive solutions can work for Mexican companies.
The people: The entire delegation has been impressed with the cordial and cooperative attitude of everyone that we have encountered. This trade mission was about forging relationships in Mexico, and I’m confident these partnerships will continue to grow and yield great captive opportunities for Mexico and the Green Mountain State. Bonus if we get some Mexican friends to come out our Annual Conference in August!
The VCIA, the DFR, the DED and our facilitators from within the federal government can all be proud of how we represented Vermont and the industry this week. All of us have an extensive to-do list, with lots of substantive follow up, not just thank you notes. We are convinced that this is a market where Vermont can offer tangible value to Mexican entities, and I am looking forwards to providing you with a special briefing on this in the very near future.
With a sixteen-inch storm due at my Vermont house, this seemed like a good time to escape to 80+ degrees in Mexico City! Aside from the weather, the real reason is the VCIA’s curation of and participation in the first ever trade mission from the Vermont captive sector to Latin America; in particular, our southern neighbor Mexico, the second largest Latin American economy and one with robust industrial and manufacturing sectors. Our goal is simple: to establish lasting relationships between Mexican companies and the Vermont captive community.
My colleague, Janice Valgoi, has spent many hours moving this from a standard VCIA roadshow into a fully-fledged multi-day event that will include meetings with industry and financial sector leadership groups as we present the case for captive insurance in general and Vermont as a domicile specifically. My hope is that I will be able to provide real-time updates via my LinkedIn Page, and if we gather enough material, to produce a Special Mexico Trade Mission Report to VCIA Members, just like we did with Legislative Day.
Three years in the making (thanks COVID), these plans were revitalized as travel restrictions were lifted. We are now all delighted to be working on developing this market – one that Vermont already has exposure in – and building a global brand for our Brave Little State. Joining myself and Janice on this trip are Brittany Nevins from the VT Department of Economic Development (DED), and the Department of Financial Regulation (DFR)’s captive team of Sandy Bigglestone, Christine Brown and Jim DeVoe-Talluto. You can find the State’s informative press release about our trade mission here. In addition, Susan Murray of the US Commercial Service, and Tim Tierney, the DED’s Director of Business Recruitment and International Trade, have been a great help, and will also be joining us in Mexico City.
For our March 1st educational session, the Vermont contingent will be joined on stage by captive owners and managers from Mexico, as we all demonstrate how coverage and pricing challenges can be addressed through captives. We have an extraordinary talented lineup that will offer diverse perspectives on the innovative uses of captives for corporations. As I’m still a captive student, I will be sure to bring my paper and pencil!
Everyone has been so patient with this project, which was planned long before my arrival – and especially tolerant have been our sponsors, AIG & Marsh, as well as the State of Vermont, all who have graciously allowed us to rely on their support despite the delay. My sincere thanks goes out to our sponsors and everyone that has made this landmark trip for our association possible – especially you, Janice Valgoi! I look forward to sharing more once I’m on the ground in “The City of Palaces.”
This week the VCIA Staff met for a daylong meeting at one of our favorite places: Trapp Family Lodge in Stowe, Vermont. And it was a special occasion, as we met for the first time with our two superlative new hires, Ella Stevens, Bookkeeper/Administrator, and Jocelyn Lamb, Accounting Manager. We were placed in the Strauss Meeting Room, and an obligatory recording of The Blue Danube was played!
Since VCIA went fully remote at the end of 2022, we’ve made sure to plan in-person staff gatherings at least once a month in order to build staff chemistry and develop those intangibles that are crucial for a close-knit small staff. This February meeting was all about gearing up for our busy season, when conference registration comes onto the horizon. 87 days until you can register for #VCIA2023, and 171 until the first day of the conference!
Time and time again I’m reminded why our staff is an invaluable asset serving members, stakeholders, and the entire captive industry. Whether it’s the deep institutional knowledge harnessed by our triumvirate Diane Leach, Peggy Companion, and Janice Valgoi, or the ingenuity and creative thinking that our younger staff employ, our staff is versatile and leaves no stone unturned in how we help members and optimize our services.
No other captive domicile or captive association can claim such a robust and effective staff force meeting the needs of its members and expanding its reach. It’s why VCIA is ready to hit full stride as we hit spring (just 31 days!) and gear up for conference preparation and promotion. As always, we’re available to listen to your needs and and provide you the best member experience!
Last week I spoke about the generalized optimism present at the World Captive Forum from the domiciles that were both presenting and exhibiting. For this week, I am going to expand on why the Green Mountain state has ‘Reasons to be Cheerful.’
Firstly, the numbers. Another top 10 year in 2022 for Vermont with 41 new captive formations and a current total of 639 licenses. Additionally, the state hosts 59 sponsored cells with an individual count of over 500. Of which over 40 were new this year. Vermont’s Governor Phil Scott said of the achievement: “Vermont has so much to offer, and the captive insurance industry remains a point of pride in our state.” It is also worth pointing out the range of activities that Vermont-based captives support: Healthcare, construction and real estate all featuring heavily. And Vermont stretches its wings a little too, with new captives being formed by entities based in Canada, Mexico, and Austria.
Secondly, stability. While there has certainly been a ‘changing of the guard’ the knowledge and strength within the DFR remains unparalleled. Be sure to watch out for details of our March webinar when some of the new leaders with the DFR (who, bluntly, are not that new at all!) will be sharing answers to the questions you need answered.
Thirdly, the VCIA. We are expanding and planning for the future – a future where we play an expanded role to match the growth that we are seeing in Vermont and beyond, and the increased demand around the industry for the quality education, networking and information unavailable elsewhere.
So, in fact, there are many reasons to be cheerful about the state of the captive industry and especially the state of the industry in Vermont. By my count it’s up to ‘Reasons to be Cheerful – Part 3.’ Added bonus points for anyone that can tell me the name of the under-appreciated band that produced a song with that title in 1979! Check it out below, and always feel free to reach out to me.
Almost a year ago, before I even joined the VCIA, I attended the World Captive Forum in Miami, and well, here I am again, learning and networking. And what a year it has been, my first as VCIA President! More on that in a future blog, but I am happy to report that there is further evidence here at this event of the resilience and growth in the captive industry. Right now, I am sitting in on the regulatory panel (featuring Vermont’s own Sandy Bigglestone), and every domicile present is talking about growth, new product lines and innovation across the board.
For Vermont and VCIA it has been a great event, strengthening our stakeholder relationships and building new ones.
We also debuted the new Vermont booth – please pay no attention to the fact that 4 captive professionals working collaboratively could not get the lights on right! Despite that, the booth looks great (we fixed the lights) and certainly acted as a beacon within the exhibit hall. Vermont is off to the races to try to top last year’s 41 new captive count!
I also got to fulfill on my mantra of ‘cooperate to grow the pie, compete for a larger slice’ by visiting with the other domiciles present to specifically invite them to the VCIA’s Annual Conference in August. While many already attend, I was happy to invite them to come as exhibitors. The greatest accolade that we could get for the VCIA Conference would be when an attendee says ‘I attended the event and got the solution I needed.’ Of course, I would be delighted if that solution was Vermont, but I must also recognize that there are many offerings in the marketplace. So far, we’ve gained great interest in other domiciles/associations for our booth spaces!
That’s all for my live World Captive Forum reporting. Sad to say we New Englanders must leave sunny Miami and return to Vermont with a temperature shift of 107°F forecast. Winter may be hard, but it won’t last forever in the Green Mountain State, and the closer spring approaches means the closer our 2023 conference cycle starts!
Last week, I recapped VCIA’s successful Legislative Day and emphasized just how valuable our legislative advocacy is to our members and to the industry. Well, I offer another VCIA asset that’s just as and if not more valuable…and that’s our tireless staff! VCIA can proudly say we are fully-staffed and able to not only strengthen and grow our association, but meet the needs of our 400+ members. Not many other captive associations can say that. And so please give a warm welcome to Ella Stevens, VCIA’s new Bookkeeper and Administrator, and Jocelyn Lamb, our Accounting Manager! Let’s get to know them.
Meet Ella Stevens, VCIA’s Bookkeeper/Administrator Ella began working with VCIA earlier this month and she’s doing so while completing her last semester at Saint Michaels in Colchester. She will be graduating with an honors bachelor degree in accounting and business administration, and our staff and Board were extremely impressed about how she can handle such a workload while learning and absorbing so much at VCIA. Says Ella: “This is my first professional job out of college and I’m excited to get into accounting on a real-world basis, understand the Vermont captive industry, and interact with VCIA members.” Fun fact? She’s an avid runner and runs at least 3 miles a day every day of the week! I personally can’t say the same…
Meet Jocelyn Lamb, VCIA’s Accounting Manager Where Ella is new to the Vermont captive industry, Jocelyn Lamb is a veteran and has years of experience, thanks to her 11 years at Vermont’s Department of Financial Regulation as an examiner and regulator. We’re lucky to add Jocelyn’s great talents, and she’s extremely happy to stay in the industry. Says Jocelyn, “It’s a wonderful opportunity to work with VCIA and to experience captive insurance from an additional perspective. I really look forward to hitting the ground running with our close-knit staff!” Fun fact? Jocelyn and her family operate a 3,000 tree sugar bush and sell maple syrup each year – you can’t get much more Vermont than that!
Please be sure to welcome Ella and Jocelyn as you see them in the year ahead; they will be an integral part of accomplishing our goals, not least of which is a successful Annual Conference in August. The work begins now!
I am not expecting a Netflix development contract to come my way after my TV appearance (well, YouTube – the recordings can be found here and here) testifying before Vermont’s Senate Finance and House Commerce committees, but you never know. In fact, I was just the ‘warm-up guy’ for the real stars, VCIA Board Chair Tracy Hassett, and the VCIA’s Legislative Committee Chair, Ben Gould. Tracy had a compelling story about saving millions of dollars for edHEALTH (a member-owned higher education group) through their medical stop-loss captive, while Ben detailed how the legislation that these two committees work on keeps Vermont as the Gold Standard of the industry. Both committees were very receptive to us, and look forward to updating and finalizing a captive bill for 2023. As soon as there is any progress, we will let VCIA members know!
Following committee testimony, VCIA’s legislative advocate Jamie Feehan organized a slate of a Legislative Leadership meetings, where nearly 30 VCIA stakeholders heard from House and Senate Minority Leaders, House Speaker, Lieutenant Governor and the State’s Treasurer on what their priorities are for the legislative session, how the parties work together, and why they will continue to be champions of the captive industry and optimize the legislation that supports it.
But I need to back up! Before all of this, the VCIA’s Board held a public session where we heard from the DFR’s Sandy Bigglestone and the DED’s Brittany Nevins on the state of the captive industry in Vermont. 41 new formations (another ‘top 10 year’)! This was followed up by an informal lunch, where House and Senate legislators were able to mix with VCIA members and staff and learn about what we do. Attendees also heard comments from DFR Commissioner Kevin Gaffney and DED Commissioner Joan Goldstein, both of whom pledged support for and praised the Vermont captive industry and VCIA. The common question of the day from lawmakers: where can I find the next captive industry for Vermont? We didn’t have an answer, but we responded quite passionately that we will continue to protect and strengthen the actual captive industry in Vermont!
Headcount restrictions in place at various locations precluded us from having a mass turnout as in past years, but rest assured that this was an effective and informative Legislative Day that we can build on after two years of virtual attendance.
Given that our advocacy work at a federal and state level is always rated as one of our strongest benefits, there’s no better time to become a VCIA Member.
When the VCIA surveys members to find out what we do that provides the greatest value, it is our legislative advocacy that usually comes out on top. It is also a defining differentiator for us, as we are the only captive association to have active advocacy in place at both a state and federal level. Additionally, we closely watch the proceedings at the National Association of Insurance Commissioners (NAIC) as they work on model legislation and standards that will affect the industry. I’m excited to get our advocacy work started this year with our annual Montpelier Legislative Day next week.
It’s our first in-person Legislative Day since 2020 before the pandemic, and the VCIA Board, staff, and legislative committee members are eager to engage with the lawmakers who will eventually finalize, pass and bring our 2023 captive bill to Governor Scott’s desk to sign and put into law.
The schedule of events for the day goes something like this: a Board meeting immediately before the Statehouse activities, with a general session open to the public at the tail end of the meeting; an informal lunch at the classy Capitol Plaza, a stones throw away from the Statehouse. This lunch will be a great opportunity to meet with select legislators and talk to them off the record about what VCIA does and why the captive industry is vital to the Vermont economy.
Afterwards, we will head over to the golden dome and share official testimony in front of the Senate Finance Committee and then the House Commerce Committee. Board Chair Tracy Hassett will provide her company edHealth’s compelling captive story, explaining why Vermont was their domicile of choice. Legislative Committee Chair Ben Gould of Paul Frank and Collins PC will discuss the process undertaken by VCIA and the DFR in crafting a bill for the legislature to consider and amend. My job will be to tell the VCIA story: how we are the bridge between the Vermont captive regulators and our members and stakeholders; how we serve as in indispensable educational resource for the entire industry; and how we bring major tourism revenue to Burlington and Vermont through our Annual Conference, one of the largest in the state.
Both Senate and House testimony will be livestreamed on the respective Senate Finance and House Commerce YouTube channels. The Statehouse continues to have a visitor policy that prevents us from inviting all of our members; however, to make up for this, we will be providing an in-depth Special Legislative Day report exclusive to VCIA members.
With great turnover within the Vermont legislature after the November 2022 elections, this Legislative Day is an important educational mission that will enlighten new lawmakers on the scope and dearth of the VCIA and the Vermont Captive Industry. We will be providing updated Fact Sheets with the big numbers that back up our claims, while presenting new information to both committees ahead of their consideration of the 2023 captive insurance bill.
I am excited to represent your interests at this, my first legislative day for the VCIA, and I will be sure to keep you informed of all of our efforts in this area on your behalf. Please reach out to me directly with any feedback!
Early in the new year seems to be a good time for predictions. Even though my abilities in prognostication may be somewhat limited, I can fall on the guidance and opinions of others to develop some ideas related to both the VCIA and the Captive industry as a whole that might stand a fighting chance of becoming reality.
Firstly, Marsh’s Ellen Charnley, speaking to Richard Cutcher in Captive Intelligencepredicted that the just-closing 2022 would be another record year for captive formations, and that this growth, while still being driven by North America, is also global. Certainly, that mirrors what we have seen in Vermont, with 2022 likely to deliver another year of over 40 formations. And it seems like the pace is not slowing – owners seem to be seeking a number of things.
Speed to market
Stability and reliability
Within the broader insurance market ratings agency, Fitch sees headwinds from inflation and a potentially weakening economy as factors driving a neutral overall assessment. This was echoed by Swiss Re in their market outlook for 2023/24, in which they suggested that this volatility could cause “rate hardening to regain momentum.” And while standard wisdom is that a hardening market assists captive growth, this could be tempered by an overall economic slowing. The opinions of Swiss Re are at slight variance with those of WTW, who comment that “commercial insurance rates (are) rising at a moderating rate.”
Predicting for the VCIA is perhaps a little easier! Staff and the Conference Task Force are already deep into planning the 2023 VCIA Conference, building on the success of a return to in-person last year. We will take our first trade mission to Mexico on March 1st, as we seek to support and develop an increasingly sophisticated and growing market there. A dynamic and involved Board will continue to challenge and inspire us to develop and deliver value for members.
The captive industry has a long history of responding to the needs of clients and potential clients through innovation. Vermont and the VCIA are a part of that, and we look forward to being able to deliver in 2023 and beyond. There are many ways to get involved, and I personally hope you do so with us this year.