FOURTH QUARTER 2013 | ISSUE 1
GROUPS ERCOMING S
E
OV
ALLENG
CH
ERATION
CO-OP
Many captives have now moved to electronic delivery/
access of all information previously delivered to the
membership only in hard copy format. Naturally, the security
of this delivery is of great concern to members. To ensure
security and confidentiality, encryption and digital rights
management software are utilised. Further, the materials
are available only through the captive’s member-only web
portal which is password secured. Additional proprietary
security measures are employed, as well.
Captives ensure that members are fully trained in the
proper access and established protocol for handling
confidential information.
suppliers, vendors, and other companies that they have
known and/or conducted business with for years, and they
often have knowledge of these companies that provides
value in the vetting process.
LONG-TERM MEMBER RETENTION.
Long-term member retention has been a persistent challenge
for some group captives. The Captive Insurance Companies
Association (CICA) 2013 Captive Insurance Market Study
reported that the biggest challenge in owning a captive as
reported by the survey participants was ‘retention/growth/
expanded utilisation’, with similar findings in its 2012 and
2011 studies.
QUALITY GROWTH.
It’s critical for a captive to grow continually so that it
maintains an appropriate spread of risk and fully leverages
its competitive operational cost. However, this can present a
challenge since highly effective loss prevention and claims
management by members – a hallmark of this captive model
– continually reduces premium.
It’s important for a group captive to add new member
companies that meet its predetermined underwriting criteria
which support the recruitment and acceptance of best-in-class
companies. It is equally important to ensure that prospective
members share the captive’s business philosophy and
commitment to safety and claims management. Yielding to
the temptation to accept new members that don’t fit these
parameters, simply for the sake of growth, will likely lead to
adverse experience and ultimately, unhappy m