Talk in top executives' terms to sell captive insurers: WCF speakers
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AVENTURA, Fla. — To sell C-suite executives on the benefits of captive insurance, risk managers need to understand what’s important to those executives and present their captive proposal in those terms, said two executives who recognize the value in their companies’ captive programs.
Speaking Wednesday at the 22nd Annual World Captive Forum at the Turnberry Isle Hotel & Resort in Aventura, Fla., Ray G. Young, senior vice president and chief financial officer of Decatur, Ill.-based Archer Daniels Midland Co., said risk managers seeking top executive support to form a captive need to understand top leaders’ backgrounds and concerns.
Meanwhile, John Alberici, chairman of St. Louis-based Alberici Corp., said that every company and every situation will be unique, with different structures and different cultures. In some cases, the risk manager might have to work to change elements of the company’s culture and attitude toward risk to convince C-suite executives of the merits of establishing a captive, he said.
Mr. Alberici said he was drawn to the benefits of a captive when he recognized the impact that reducing his construction company’s insurance costs could have on improving its margin. “So for me it made sense to attack it from that side,” he said.
Mr. Young said that at ADM the captive plays a part in efforts to help the agricultural processor’s business units reduce costs and pursue business opportunities. “From a CFO’s perspective clearly I’m interested in cost and reduction of costs,” Mr. Young said. “But I’m also interested in returns.”
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