VCIA Members had blast last night at ECHO Science Museum and Aquarium, right on the Lake Champlain Waterfront with views of the Adirondack Mountains! Great festive atmosphere with personal and captive catch ups interspersed. Thanks for everyone who came out!
An accountant, an auditor, and a tax lawyer walk into a bar…just kidding, no joke here. But have you ever had fun at a tax seminar? Well I think you just might at our Captive Taxation webinar next week. For real!
For those of you that think that high jinx might be a little lacking as you wade through IRS and state taxes for captives, then we may have the right antidote to put you in the mood for holiday cheer.
I have been present as Chaz Lavelle and Dan Kusaila have been developing and practicing for next week’s VCIA tax webinar and it has been a total hoot to watch as these two long time thought leaders and contributors to the VCIA combine a review of the arcane backwaters of tax with anarchic humor.
Perhaps most importantly, they know how to get the information across that you need without drifting and being obscure. If the execution is anything like the prep, it will be a great hour! Enjoy their company, hear some interesting captive tax anecdotes, and learn about what’s ahead for our industry, tax-wise, in 2023. If you haven’t done so, you can still register for the tax webinar here. You won’t be disappointed by Chaz and Dan!
Of course, we have a more typical way to get into the holiday spirit with our annual holiday party the day before the tax webinar. Over 80 of your colleagues have already registered for this event, and I look forward to meeting friends old and new as we wind down what has been an exceptional 2022 for the VCIA with a great event at ECHO in Burlington. VCIA members can register for their free holiday mixer here.
I hope to see you at these events next week!
After a brief break for the Thanksgiving holiday, we’re back to review Vermont’s renewed focus on business not only beyond state borders, but also outside of the US.
Just before the Thanksgiving break, a Vermont delegation led by the DFR’s Sandy Bigglestone and including myself and Brittany Nevins as well as representatives from the Vermont professional provider community were present in Luxembourg for the European Captive Forum. At the awards dinner we were naturally delighted to be named as the international domicile of the year, and beyond that we worked on building and establishing relationships across the captive industry in the EU, broader Europe and beyond. With companies from outside of the US seeking to explore alternative risk management strategies for the US and Americas holdings, this was a great time for us to present Vermont and our preparedness to work with global business to a broader audience.
Looking forward into 2023, we are building on the international theme as our COVID-delayed roadshow goes to Mexico City on March 1st. In addition to the roadshow, we are holding multiple meetings with the business, financial and insurance sectors within Mexico as the roadshow expands into a full-blown trade mission. The current lineup of speakers is found below, and Mexican business professionals as well as VCIA members are invited free of charge to this special event. (To register, send your name, title, and contact information to Sylvia.Montano@trade.gov. For questions reach out to Janice Valgoi at janice@vcia.com)
Vermont already has Mexican companies domiciling their captives here, and as that market both grows and becomes more sophisticated, Vermont is ready to be the domicile of choice for Mexican business.
Fun fact time – what do Thomas’s English muffins, Lender’s Bagels, CEMEX and Promised Land Dairy have in common – yup, Mexican owned! Mexico has an economy of $1,150B according to the IMF, making it globally #15, so ahead of Spain, Saudi Arabia and the Netherlands. For these reasons and many others, Vermont and the VCIA is working to ensure that enterprises in this expanding economy have access to well- regulated and effective risk management tools.
As the year comes to a close, VCIA – its staff, Board members and stakeholders – reflect on where we are and where we are going. I’m confident an emerging theme that will continue to surface in 2023 and beyond is our global reach and how we can serve our worldwide members.
These last few weeks I’ve spent more time in hotel rooms and airplanes than I’ve spent at home. Now, happily snug in my snowy–yes, already–Vermont headquarters, I can reflect on quite a trip the State of Vermont and VCIA had to Luxembourg for the European Captive Forum.
The trip, and the conference, had a perfect combination of networking and educational sessions. Deputy Commissioner Sandy Bigglestone led an engaging topic on “Why and How to Establish a Captive” and the Vermont team heard from stateside and international industry colleagues about opportunities for new captive formations in the Green Mountain State. I was personally happy to hear a recurrent point about how many people are eager for the business possibilities, networking values, and educational content of our annual conference…even if it’s more than 8 months away! Even so, we are already hard at work on creating an optimal experience for our attendees.
The “hard at work” phrase kept in my mind as we learned that Vermont won the International Domicile of the Year during the Captive Review European Awards. The announcement on LinkedIn read: “Moving on to the next category at #EUCaptiveAwards 2022 where we have the International Domicile…And it is of course Vermont who have earned our congratulations!”
I’m still less than a year in as VCIA President/industry representative, so it struck me that the “of course” preposition to describe our award reflects the healthy and productive infrastructure that VCIA and the State has built–and continues to strengthen. That’s why I responded to Captive Review’s post like this: ” ‘Of course Vermont’ is a delightful comment, but rest assured that the industry-leading regulators, service providers and managers, economic development professionals and the VCIA are NOT resting on their laurels as we all further develop the ‘Gold Standard’ that garners awards like these.”
We’re further developing our Gold Standard here at VCIA by starting a Strategic Planning process that will result in a comprehensive and innovative blueprint that will guide us into prosperous future in partnership with our members, stakeholders, and the industry as a whole. Our newly appointed Board Chair Tracy Hassett said it in a nutshell: VCIA will be thinking “blue sky big” in how we can provide more to our members, meet captive owner/industry needs, and increase our impact and reach. So I encourage you to join us. Become a member, join a committee, share your feedback. This is YOUR organization, and the success we experienced at ECF only motivates us to higher ground.
I can’t tell you how many folks have shared their excitement with me about VCIA’s upcoming Captive Benchmarking Webinar taking place next Wednesday November 16th at 2-3pm EST. It’s been a few years since our last benchmarking program, so it’s high time to update everyone on the health of captive financials in the State of Vermont. This year’s event is gearing up to be one of our most-attended webinars, and you can still get the important data by registering here!
I am lucky enough to moderate a conversation with the above captive financial data wizards, and I wanted to hear from them beforehand why they are excited for next week’s webinar.
With negative year-to-date investment returns reducing both profitability and surplus for captives, it is an opportune time to discuss best practices in benchmark selection for insurance entities that not only considers investment risk tolerances, but also the connection to the risks being underwritten by the captive
Bill piel, President of Institutional Markets, Opus Investment Management
During the webinar, Amy Angell of Milliman, Inc., plans to review surplus levels, identify ways to monitor claims performance, and to evaluate whether risk management programs are having the desired outcomes on the loss experience. She’ll do this all by looking at the hard data of the financial records of the 2021 EOY domiciled captives of the State of Vermont, listed by type of captive and by industry type.
What’s revving her up for next week? She told me point blank: “Benchmarking is a powerful tool that provides meaningful and actionable insights to captive owners.” If you want to start game planning for captive’s financial goals, then there’s no better place to start than our Hot Topics webinar.
Next to Amy will be her accomplished colleagues, Becky Aitchison, Captive Insurance Examiner for the State of Vermont DFR, and Bill Piel, President of the Opus Institutional Markets.
Becky is basically the source keeper the data aggregated and shared annually by the DFR. She will explain the key ratios used by the DFR for the surveillance of your captive’s financial health, and what markers she looks for in determining how a certain captive may or may not be thriving.
From an investment perspective, Bill will let you in on the primary reasons for establishing an investment policy and how the DFR data can help assist with developing an appropriate asset allocation unique to your captive. He will also identify ways to monitor investment performance and evaluate whether results are having the desired impact on your financial statements.
What makes Bill excited for the webinar? “With negative year-to-date investment returns reducing both profitability and surplus for captives, it is an opportune time to discuss best practices in benchmark selection for insurance entities that not only considers investment risk tolerances, but also the connection to the risks being underwritten by the captive.”
So, we have the expert who comes up with the data, and the other experts who will explain how to use the latest data to your benefit. It’s a win win!
I look forward to facilitating a data-driven conversation that looks into how your captive – and the Vermont captive landscape at large – has faired in the last financial year, and what that may say about the future. Remember to register, and “see you” there!
Captive Corner: VCIA Interviews Industry Experts
ue.org / @UnitedEducators / United Educators LinkedIn Company Page
| United Educators is a reciprocal risk retention group that provides the insurance coverage needs of more than 1,600 members ranging from large university systems to small, independent K-12 schools. Joe Carter’s responsibility is to set the strategy for UE’s growth. This includes planning the business development and distribution strategies that ensure success. He is also responsible for teams that manage UE’s brand and constituent experience strategy, the Voice of Constituent (VOC) program, digital experience, member support, marketing, and communications. Joe recently was elected to the Board of Directors at VCIA, and we sat down with him to ask a few questions. 1. Tell us how you got involved with insurance and risk management. How did you come to UE? The early days in my professional journey were rooted in large commercial insurance companies with fantastic training programs for new employees. I began by handling first and third-party claims in an environment best described as “rapid fire” for America’s second largest insurance company at the time. I had the rare opportunity to rotate through other functions of the company including underwriting, risk management consulting, front-line sales management, and leadership coaching. Then I started an independent insurance agency/brokerage that I grew and sold to a larger agency owned by a regional bank. After a couple of additional executive leadership roles, I found this wonderful Risk Retention Group (RRG) captive that focused on education, a sector that I think is so important to our world. Joining United Educators was a chance to apply all my experiences to lead UE’s business development strategy, marketing, and member experience – a home run opportunity for me. 2. UE is celebrating its 35-year anniversary. What do you provide your members? We continue to deliver the third-party liability coverages that drove our creation by educational institutions in 1987. A significant part of our work is delivered well before any claims call comes in. We research and build training, loss prevention courses, and risk management tools that not only help prevent bad things from happening, but also help institutions prepare for bad things that are likely to happen. We are proud that these risk management resources are highly valued and utilized by educational institutions. Our resolutions team partners with institutions as soon as there is a concern about a potential claims matter. They help strategize early, while taking a Cool Head, Warm Heart® approach to resolving claims that recognizes the value of the relationships our members have with their students, staff, and communities. |
All captives need to focus on their differentiation from commercial markets and think hard about why they exist. There needs to be a shared understanding about what captives are really accomplishing for their owners. I believe captives have a unique opportunity to help owners to see risks that lie ahead using trends from a purer set of data and experience.
3. What have you seen in the time you have been there? Can you tell us a little about the culture at UE? There are many liability lessons from education claims over the 35 years: preparation is as important as seeking prevention, active and early intervention usually is more effective than the “wait and see” tactics we’ve seen used by other carriers, and treating claimants with respect and empathy is an important part of loss mitigation, to name a few. Our culture is shaped by being member-owned. We’re serving members amid upheaval of the education sector, market fluctuations, and skyrocketing claims and defense costs. Enjoying a personal connection to our members drives an ethos of excellence in member service. 4. What are some of the challenges you see today for your members and what innovations is UE bringing to them to meet those challenges? We see several challenges that have been pervasive with new ones emerging. In recent years, we’ve monitored how demographic shifts are affecting enrollments and the top lines for many institutions. And we all think about the financial and operational risks going forward for tuition-dependent institutions. There are also real concerns about keeping campuses operating as healthy and safe environments for in-person learning. Most campuses, including K-12 sites, are concerned about student mental health for good reasons. And many are concerned about employee mental health as we transition through the next phase of this pandemic. And there is the ever-present challenge that all employers face in managing risks such as employment and misconduct issues involving high-profile and highly-valued employees. In the education arena, these include coaches, researchers, faculty, presidents, or trustees. UE’s risk research and resolutions teams work constantly to develop useful tools that help break these complex exposures down into tactical and useful programs that help campuses effectively plan and train administrators, employees, and students on staying healthy and safe. 5. What are some of the challenges facing UE as an organization and the captive insurance/RRG industry as a whole? UE faces many of the same challenges that most providers do. We are seeing loss inflation that goes beyond just a rise in the average cost of a claim or even a category of claims. The rise in claims costs and awards reflects a societal trend that is punishing institutions of any type without regard to the nexus between bad verdicts and the rising costs of insurance going forward. Insurer investment strategies aren’t delivering much return in recent environments, so there is great pressure to underwrite and price your business accurately and on time. That is a hard pill for owners to swallow during times of rising loss costs. All captives need to do their best job of speaking this truth to their owners. And when we are doing this correctly, owners understand that the captive’s health is directly tied to their ability to manage risks and losses. All captives need to focus on their differentiation from commercial markets and think hard about why they exist. There needs to be a shared understanding about what captives are really accomplishing for their owners. I believe captives have a unique opportunity to help owners to see risks that lie ahead using trends from a purer set of data and experience. 6. Why does Vermont fit UE’s mission and business plan as your domicile of choice? I believe that one of the best things that Vermont does for domiciled captives is allowing and encouraging open dialogue. They do a really good job at getting to know the organizations doing business in and around the state. They show up at industry conferences not just to speak and deliver content, but to also listen and learn. That’s a level of engagement that allows them to be helpful to innovation while they ensure compliance. No one wants to see bad captives formed or operating in the market. I believe Vermont’s approach to engagement keeps the marketplace respectable and healthy for consumers of these services. |
7. What are you most proud of as you look back over the past 35 years for UE? There are many things that I could talk about. It is impressive how our captive and its membership have grown so much since I joined. The staff I have the pleasure of working with and learning from every day are smart and bring a rich diversity of experience. They work collaboratively and challenge us leaders to think hard, consider much, and act decisively. We’ve also been working hard to foster and improve our culture of inclusivity. I am proud of how our teams contribute in many ways. And we’re just getting started. I know we will continue to grow our culture of diversity, equity, inclusion, and belonging.
8. Is there anything that we didn’t cover that you wanted to talk about? I think captive organizations represent the best in business relationships between owner and provider. Being able to do this constituent experience work on behalf of those that you serve just demonstrates a purity in relationship that cannot happen with the influence of third-party shareholders. And all captives have that opportunity to focus forward to give owners more research, more knowledge, more attention, and better service than any other option in the market. In fact, there should really be no better experience available when an effective captive option is present. No other option can to focus and deliver like we do.
All captives have that opportunity to focus forward to give owners more research, more knowledge, more attention, and better service than any other option in the market. In fact, there should really be no better experience available when an effective captive option is present. No other option can to focus and deliver like we do.
My second VCIA roadshow and it was remarkable in so many ways. On LinkedIn, attendee Isaac Muller said, “It was a fantastic experience as we met industry experts from the insurance and captive worlds. We listened to them, we learned from them and got to talk to many of them.”
Thanks for hosting, EY!
Immersive sessions had Andrew Baillie sharing his experiences at AES, delivered with his trademark gentle Scottish humor. Presenting with Andrew was Dianne Salter, and she added insight into captive usage in regional medical centers with multiple campuses and thousands of professionals. The regulatory environment was well-covered, and there was a fascinating peek into the future of captives with another panel led by Mikhail Raybshteyn.
Added to this was the view from EY’s new building – peering down 48 floors to the new Moynihan Train Hall and across to the Empire State Building. Not bad, for New York!
That’s it for 2022 roadshows, but our first for 2023 will be in Mexico City. We’re going global! And please, feel free to invite us to your city and learn what captives can do for you, your clients and risk management professionals.
A huge thanks to our sponsors – the State of Vermont, Marsh, AM Best and EY!
I love New York, even though it isn’t mine, the way something has to be, a tree or a street or a house, something, anyway, that belongs to me because I belong to it.
Truman Capote
Board meetings – A rough count has me at over 100 of these, sometimes as a Board member and sometimes as someone reporting to a Board. The VCIA’s Board just held its last meeting of 2022, and it is a good time to reflect on similarities and differences.
Similarities – A horseshoe table, a conference phone and water set. And that’s about it!
Differences – Board members calling in from Hawaii at 5:30 in the morning. A view out on to the late fall landscape of Stowe, Vermont. Great catering. But all of those are just superficial. Here are the fundamental differences with how the VCIA Board operated at a marathon 7-hour Board meeting:
Staff are present for everything except Executive Session. With 60+ years of accumulated staff experience their absence would have meant a less informed Board. And please don’t get the impression that staff sat meekly to one side. For a start this isn’t that sort of staff, and secondly the Chair actively sought comprehensive input from all staff members.
Every Board member participated, voiced opinions and created spirited discussion. Clearly, 2022 is shaping up to be very successful for the VCIA operationally and financially. But rather than seek to duplicate and develop, the Board questioned the fundamentals of VCIA operations and how we serve our members in a dynamic and growing market.
Absence of pride. Lots of proposals and ideas were discussed. The originators of those ideas actively participated as their original thoughts were discussed, refined, discarded (occasionally) or adopted.
Participation. Every Board meeting since I have joined has had 100% attendance. This is despite the travel commitment involved or getting up early to join virtually.
The Leadership within the Board meeting. As the Chair position changes to Tracy Hassett from Andrew Baillie there is a continuing clear and effective leadership style from the Chair. Opinions are sought, time is taken to explore options, conversations around critical issues are allowed to develop, but any ‘drift’ is gently addressed. Both the past and current leaders (and I am sure that this applies to past Chairs as well) used their skills to extract productivity and consensus from a diverse group of leaders within the captive industry.
For staff members, it is empowering and enjoyable to be so close to the owners’ representatives through exposure to the Board. For Board members, I would certainly hope that they believe that their Board membership, and they ways that they conduct themselves as a Board provides personal and professional value to them in addition to the altruistic goal of building a stronger VCIA. We all can’t wait to get to work on the Big Pictures Ideas for our association. It starts now!
Ever heard the Indian parable about the blind men and the elephant? Each man was asked to describe the elephant based only on the part they could touch. The one who touched the leg said it was like a tree, the one who had the tail said it was like a rope, etc. According to the wise Wikipedia, it’s “about a range of truths and mistakes. It is also about the need for communication and the need for respect for different perspectives.”
In the eight months I have been with the VCIA I have started to become familiar with ‘our part of the elephant’ as it applies to Vermont-based captives, but this week I had the opportunity to expand my knowledge by attending the SIIA (Self Insurance Institute of America) annual conference in Phoenix, AZ. There, I got to see a whole different part of the elephant! It was standing room only for a session called ‘Captives to the Rescue.’ The participants in this session (80% of whom were from what we can call the ‘medical field’ – including benefit plans, insurers, hospitals, etc.) heard what captives can do for them and for the changing risk profiles. While very few of those present were involved in Vermont captives, it was clear that, just like in Vermont, this is a growing industry as all sectors evolve to serve the changing needs of industries, services, and public organizations.
Just like in Vermont, this is a growing industry as all sectors evolve to serve the changing needs of industries, services, and public organizations
Kevin Mead on the Diverse IMpact of Captives
Next month, the Vermont DFR’s Sandy Bigglestone will be a presenter at the European Captive Forum in Luxembourg. (Obligatory plug: she’ll also speak at our October 26th New York City Roadshow, which you can register for here!) Brittany Nevins of the Vermont DED and myself will also be there as we seek to show the capacity and capability of Vermont to a well-established group of risk professionals.
From whatever angle one approaches the elephant that is captive insurance, it is an expanding and exciting place to be. And while, just like the parable, no one person could ever have a full and complete picture of the industry, the range of options, services and expertise out there to assist entities in managing their risk utilizing captives is probably the best it has ever been. Add to the conversation by commenting, or emailing me kmead@vcia.com. I look forward to connecting.
It’s been 57 days since the last day of #VCIA2022. Summer has come to a close here in Vermont, and we are in full-on foliage mode. That doesn’t keep me from counting how many days until our next annual conference! 304 to be exact. In the meantime, we have a treasure trove of high-quality photos and I want to share some with you. Looking for more, or want to see if you’re in any? Contact Francis at fmcgill@vcia.com and he’ll be happy to help you out. Now without further ado, I give you VCIA’s 37th Annual Conference, in pictures – Part II!
In Session: Focusing on Captive Education at #VCIA2022
Rekindling Friendships and Making New Connections: Business Networking at #VCIA2022
Hotel Vermont Reception!
And a HUGE thank you from us staff (and Monty the VCIA Bear!) for your attendance made #VCIA2022 one for the record books! See you in 2023!
Captivated 