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 Intelligence predicted 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.