Spring Consulting Group

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Looking for opportunities

Prabal Lakhanpal of Spring Consulting Group is excited for the continued growth and evolution of the captive insurance market.

“We bring deep expertise to the table for our clients.”

Prabal Lakhanpal

Spring Consulting Group

The market continues to evolve but there are still substantive amounts of growth opportunities in the captive insurance sector, specifically in benefit and property & casualty (P&C) lines.

We’ve seen a lot of growth in the last 10 years with new captive formations in the middle-market sector, which will likely continue as companies look for ways to create more cost-effective and transparent insurance funding solutions.

The current economic climate will likely yield a continued increase in captive interest, with companies looking for additional ways to save money and improve cash flow. For those organisations that already have captives, risk managers are looking to grow the captive and continue to drive additional efficiencies to the programmes. The economic conditions support the continued use of captives.

We expect to see not only growth in new captives, but also an uptick in optimisation efforts for existing captives; with organisations feeling the pressure to ensure cost efficiency and restructure existing coverages.

Emerging risks are top of mind for all organisations. We are seeing captives being leveraged in new and timely ways, such as for climate, cyber and excess limit risks. Another factor in captive growth potential is the increasing number of domiciles with captive-friendly legislation, a trend we expect to continue.

Spring is uniquely poised to provide unbiased captive consulting services across both employee benefits and P&C lines. Our consulting practices are well integrated with our benefit and P&C actuarial teams.

This allows us the ability to work through problems in unique ways. Our integrated team represents industry veterans and trailblazers alongside the next generation of captive talent. Our actuaries and consultants work in tandem to enable clients to better understand the whole picture of their programmes, where improvements could be made, and how the cogs of the wheel interplay with each other.

We use a well-outlined structure to uncover challenges and develop solutions that make sense to the unique needs of each client. One of the biggest advantages of captives is their ability to create customised programmes, and the same can be said about Spring. We have worked on thousands of captives, in establishing them from the ground up as well as supporting longstanding programmes to evolve and get to the next level.

Looking ahead

Will the hard market continue? The insurance market in general has always been cyclical, but there is a lot of uncertainty around the length of the market cycles and the severity of the cycle. For instance, it took many industry professionals by surprise that the soft market lasted for as long as it did through when the COVID-19 pandemic started.

We are starting to see signs of some softening and more capacity in the markets as carriers are more willing to broaden their risk appetite. Increases in profitability in the marketplace for certain lines drives much of this rise in level of competition.

As a result, as the captive markets continue to evolve, we are seeing a demand for different kind of solutions and offerings from the commercial markets. Commercial market programmes need to continue to evolve and more carriers develop captive focused solutions and offerings, be it through fronted programmes or large deductible programmes for middle-market insureds.

We bring deep expertise to the table for our clients and specialise in working across multiple subject areas: risk, benefits, HR, legal, finance, etc. This allows us to meet stakeholders where they sit and speak in their language. This has been an important success factor for us as we have worked to develop a variety of unique cross-functional solutions. This has been made possible by our collaborative work style that creates cohesive teams of consultants and actuaries across benefits and P&C.

We also work with clients through all aspects of captive servicing and pull in the best-in-class partners for legal, audit, claims management, and captive management to develop captive solutions for clients.

Finally, as we look to the future and what advice to give the next generation of talent in this sector, from our perspective, the captive insurance industry provides a perfect platform for young individuals to create a niche for themselves.

The industry is expertise-driven and developing networks, and subject matter depth is the best way to lay a strong foundation for long-term success. Intellectual curiosity has always held me in good stead as a great deal can be learned from attending industry conferences.

The industry has numerous leaders and veterans who are always willing to help and guide individuals. Companies must take advantage of this and use these veterans to expand their professional networks and educate that next generation.

Prabal Lakhanpal is vice president at Spring Consulting Group. He can be contacted at: prabal.lakhanpal@springgroup.com

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