CAPTIVEINSIGHT
In addition, most of the business owners that join the captive
are not insurance experts per se, and on a day-to-day basis,
are focused primarily on operating their own companies.
However, they are owners of the captive as well and need
the requisite knowledge to make sound decisions.
Members must understand the true purpose of the captive,
risk funding formula, structure/flow, functional areas
(role of various service providers), responsibilities of
membership, and more. Examples of post-entry educational
initiatives include formal orientation for incoming members,
mentoring programs, and ongoing refresher sessions for
existing members.
CONSULTATIVE SELECTION.
A certain level of subjectivity exists in the new member
selection process. To the extent possible, prospective
members must be vetted to ensure that their business
philosophy is aligned with the captive’s: Is the company
comfortable sharing risk with other business owners? Is it
willing to participate in running the captive? Is management
truly committed to safety, loss prevention and proactive
claims management? Does the company understand its
fiduciary duty to the captive? – i.e., Will the company be
able to put the interests of the captive above its own as
policyholder? An interrogative and consultative approach
to selecting new members helps to determine whether the
company is a truly good fit for the group.
CONTINUOUS SAFETY/RISK MANAGEMENT
IMPROVEMENT.
While best-in-class companies are recruited for membership,
that doesn’t always translate to new member safety and
risk management programs that are as good as they can be.
New members are subject to an in-depth safety and risk
management program assessment either before entering
the captive or shortly thereafter, the goal of which, is to
identify areas of the company’s risk management program
that may need improvement. However, a new member may
believe that its programs are already optimal, so were it
to be assessed “average” by the captive, this may not be
received with enthusiasm. Captives address this potential
situation in two ways.
First, by adequately preparing prospective members on
what to expect with regard to the captive’s risk management
guidelines, this situation is either mitigated or avoided
entirely. Because controlling losses is so important to
the success of the group captive model, captives develop
fairly stringent risk management benchmarks for members
and measure their performance, tracking key performance
indicators. Prospective members understand that they must
be committed to operating their company safely.
Secondly, captives provide a wealth of customised, state-ofthe-art risk management services and resources to members
to support them in their efforts. Typical support services
provided include semi-annual risk control workshops,
monthly webinars, captive web portal, facilitation of a
partnership with the National Safety Council, and a risk
control group purchasing programme. In addition, each
member is allocated a percentage of its premium which
it may use toward safety and risk management services
of its choosing, according to its specific needs (within
captive prescribed guideli