One thing about living in Vermont is that you know when it gets toward the end of the year – it’s dark, cold and often snowy. Just keeps us in a rhythm with nature, I guess. But it also signals the start of lighter days ahead. With that introspective hackneyed opening, it’s time to ponder the end and look ahead.

It was another good, albeit challenging year in the captive industry. We continue to see growth industry-wide as more organizations (big and small) take control of aspects of their own risk which in the past they would have pushed off to the commercial insurance market.  There are now over 5,000 captive insurance companies worldwide, and growing interest from smaller to middle sized entities seeking ways to mitigate new and emerging risks.  Emerging risks, such as cyber risk and supply chain risk, present opportunities to the captive insurance world, which can respond more quickly and precisely than traditional insurance. We see the risk starkly with the very recent cyber-attack on Sony by shadowy assailants who are causing major disruptions to Sony’s operations. Owning the risk early on may have helped Sony protect itself from these types of attacks.

Even as captive insurance has emerged solidly as a mainstream risk financing tool, there is still work to be done.  We continue to see  challenges to the industry, including  threats of excessive regulation; the weakening of sound regulatory structures based on a desire to attract business; and efforts to impose new or increased taxes.  As Congress left Washington this week without passing a TRIA reauthorization, we are reminded that we have our work cut out for us next year.

All in all, however, I wouldn’t want to be anywhere else. We have so many opportunities for growth, and will work hard to see captives continue to prosper!

Have a safe and happy holiday season and terrific New Year! Thank you all very much, and I look forward to hearing from you soon!

~Rich