What is captive insurance? Educating the next generation

If you asked the average university student what captive insurance is, what kind of replies would you get?

According to a number of leading experts in the captive insurance industry, many of the replies would be on the lines of “what’s captive insurance?”.

In the second of our articles looking at talent and recruitment in the captive insurance industry, many of the judges for Captive International’s FORTY Under 40 project highlighted the fact that educating students about exactly what captive insurance is, can be key to locating and hiring future talent.

According to Grainne Richmond, head of captives at Aon, this is not a US or Bermuda or Cayman problem—it’s bigger than that. She told Captive International that it is up to the industry globally to improve the messaging on the long-term career opportunities available in captive insurance.

Anjanette Fowler, managing director and senior vice president, Insurance & Specialised Industries Group at PNC Institutional Asset Management, said she does not believe that students understand what the captive insurance industry can offer. She said that it would be important to get them to see what the captives space has to offer while they are still in college.

As she pointed out, associations such as CICA, WRCIC and others are doing this by allowing students to attend their annual conferences at little to no cost. In addition, CICA has its student essay contest.

Many students, even insurance majors, don’t know what a captive is, let alone what the industry offers, said Nick Hentges, chief executive of Captive Resources. Part of the reason for this, he explained, is that captive insurance hasn’t been widely included in the curriculum for insurance or finance majors—it’s sometimes cited, but only tangentially. However, that is beginning to change, partly because of the industry’s outreach—colleges that are including captive insurance education in their curriculum include Florida State University, University of Georgia, Temple, and The University of Iowa.

The issue of putting captive insurance on college curriculums was brought up by other judges. William Thomas-Ferrand, international practice leader of Marsh Captive Solutions, said that he would like to see captives being a bigger part of the curriculum for finance/insurance courses. He thinks that captive managers should be interacting much more with universities/higher education facilities, especially when a university is close to a known captive domicile.

Phillip Giles, managing director of MSL Captive Solutions, agreed with this and said that his suspicion is that most university students are primarily taught the conventional insurance structures and don’t have enough awareness of the captive and alternative risk industry. Professionals with accounting, actuarial and financial backgrounds can enter the captive insurance industry quite easily because of the specific nature of the work, he pointed out.

For most other positions, Giles said that it’s good to spend time gaining base-level experience in more traditional segments of the commercial insurance industry. This will help foster a deeper understanding of specific lines of business and traditional insurance structures before moving on to specialise in alternative risk.

“As with any segment in the insurance industry, captives need to have both technical and non-technical staff,” Giles pointed out. “There is something that can appeal to just about any type of personality and satisfy any intellectual interest level. Technical pursuits generally include accounting, actuarial, underwriting, data analytics, and claims. Non-technical positions can vary but will probably focus more on business development, especially for group captives.”

Finally, Sandy Bigglestone, deputy commissioner, captive insurance at the Vermont Department of Financial Regulation, underlined that raising more awareness and providing valuable opportunities would not be a waste of time, and can only help students know what this great industry can offer.