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!
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!
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.