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With this post I'll be signing off on the Claims & Occurrences blog here at BusinessInsurance.com.
It's been a fun experiment for the past several months, but with all that's changing both in risk management and insurance—and in the way news organizations like Business Insurance are able to provide needed information to our readers—it seems the best course is probably to devote the time and energy spent on these posts to other methods of serving you.
Thanks to all of you who have followed the blog, and, in particular, to those of you who might go way back to the days when Claims & Occurrences first appeared on BI's Industry Focus site. Going forward I'll continue to be involved in our coverage of captive insurance and other topics both in print and online, aiming to keep providing you information that's both important and—from time to time—even fun.
So, thanks again, and now, back to work.
Missouri insurance officials credit a state law enacted earlier this year simplifying the formation of captives in the state for interest in the local captive industry and the formation of a new captive there by Ralcorp Holdings Inc.
St. Louis-based Ralcorp is a producer of private-label foods and foodservice products.
Missouri Gov. Jay Nixon signed the new law in July, easing the relocation of captives to Missouri and making it more attractive for out-of-state companies to form in Missouri. Missouri regulators say that since the law was enacted they've seen considerable interest in the domicile from companies across the country.
Missouri regulators also said that premiums written by Missouri captives have increased from $30 million in 2007 to $123 million in 2008, and they estimated they would reach approximately $1 billion by the end of this year.
I'm at the 19th Annual World Captive Forum in Bonita Springs, Fla., where Zurich Global Corporate CEO Mario Vitale offered some interesting thoughts in his keynote presentation this morning.
Among the perspectives Mr. Vitale presented was the notion that many global businesses are too large to be served adequately by insurers that might be forced to reduce their scale by efforts to address problems posed in the financial crisis by companies deemed “too big to fail.”
“We simply can't expect small insurers to meet the needs of large customers operating in all corners of the world,” Mr. Vitale said. Like it or not, he said, large financial institutions are necessary, and the “too big to fail” issue must be solved without limiting the size of financial institutions.
As for captives, Mr. Vitale said the alternative risk transfer mechanisms play “a very important role in the utilization of capital” in insurance. And, he said, the captive insurance industry also plays a vital part in driving innovation in the traditional insurance market.
“I think the captive insurance industry is pushing us all and should push us to develop new products and services,” he said.
Interesting to see the joint approach some captive domiciles in the western United States are taking to promoting their efforts.
The Arizona Captive Insurance Assn. and the Utah Captive Insurance Assn. announced recently that they'll co-sponsor a Western Region Captive Insurance Conference next year in Phoenix. The joint April event at the Arizona Biltmore Resort is intended to allow participants to maximize value by attending a single event.
During a webcast Wednesday on domicile issues sponsored by A.M. Best Co. Inc., Joel S. Chansky, consulting actuary at Milliman Inc. and vp of the Arizona captive group, said that the combined format will be particularly beneficial to captive industry service providers who will be able to reach captive owners and prospects in both domiciles while incurring the costs of just one conference.
The two captive groups noted that they'd like to get other western domiciles involved in the regional event, saying that Nevada, Montana, Colorado and Hawaii had all been invited to co-sponsor the inaugural regional conference, but “the timing was not quite right for them.”
By the way, if you've got any thoughts about that or any other posts here, I'd like to invite you to use the blog's easy-to-use “Comments” function.
I posted an item a few weeks back talking about the growing pet health insurance market and explaining our reasoning for purchasing a pet health plan for our dog, Smoke, when we brought him into our pack about a year ago.
A bit of an update: In that post, I suggested that we hoped not to have to tap that insurance until Smoke's senior years. Well, if you happened to read my column in the print BI today, you know that that was a bit of wishful thinking, as I'll likely be making a claim to recover some of our costs for Smoke's recent treatment for pneumonia.
Smoke's illness caught us by surprise, but the good news is we have pet health insurance, and the better news is that Smoke seems to be doing quite well. So well, in fact, that restricting the exercise of a not quite two-year-old flat coated retriever for seven days has been the most challenging aspect of his recovery.
At any rate, Smoke has a follow up visit with the vet tonight, and hopefully will be cleared to return to his normal tennis ball chasing routine on our morning walk tomorrow. Meanwhile, I'm going to continue following the development of the pet insurance market, and any signs of growing interest in including it as a standard employee benefit!
There have been suggestions from time to time that the alternative risk transfer market and the traditional insurance market are drawing ever closer together.
I think there's evidence of that trend here in Orlando at the annual meeting of the Property Casualty Insurers Assn. of America, where Janice M. Abraham, president and chief executive officer of United Educators Insurance, is set to become PCI chair.
Chevy Chase, Md.-based United Educators, of course, is a reciprocal risk retention group, owned and governed by nearly 1,200 member colleges, universities, independent schools, public school districts, school insurance pools and related organizations across the United States.
UE formed during the 1980s liability crisis, when many educational institutions couldn't find coverage in the traditional market. It's operated as an alternative to the commercial market ever since.
Ms. Abraham cites the diversity of PCI's membership as one of the organization's strengths. Her role in the organization and that of United Educators speaks to the breadth of that diversity.
This will be little surprise to parties to reinsurance discussions taking place at this year's PCI meeting, but, the word from the annual reinsurance gathering in Baden-Baden, Germany is there's no hard market in sight.
That makes a notion put forth in a Monday conversation with Grace Osborne at the PCI's annual gathering in Orlando particularly interesting for insurers, I'd think.
Talking about the development of insurers' enterprise risk management programs, Ms. Osborne, managing director and head of North American insurance ratings at Standard & Poor's Corp., noted that companies that define their risk tolerances more clearly should see better monitoring of their risk and reduced capital volatility as a result.
“If that is the case, then the length of depressed cycles and the length of peak ones—which are always shorter—should be more moderated in the future,” Ms. Osborne said.
I'd think that sort of development—a more moderated cycle--would be good news to insurers. Of course, as Ms. Osborne noted, as with many things, “The difficulty's always in execution.”
I'm in Orlando for this year's annual meeting of the Property Casualty Insurers Assn. of America. This year's meeting obviously takes place against the backdrop of a year unlike any many of us have experienced.
Given the events of the past year, it's appropriate that this year's PCI conference will revolve around a theme of dealing with risk. The property/casualty industry's understanding of risk and how it deals with it has been a key factor in allowing the P/C industry to perform better than many other sectors of the financial service industry during the recent financial crisis.
“We take risk seriously,” David A. Sampson, the PCI's president and chief executive officer said of the property/casualty industry recently. “It's taking risk seriously that's allowed us to perform so well.”
Throughout this year's agenda are sessions focusing on dealing with various forms of risk, subjects which couldn't be more fitting in this environment.
I'll be posting to the blog throughout the conference.
I was in New York yesterday for a luncheon celebrating the honorees in this year's first Business Insurance Best Places to Work in Insurance program. It was a great event, drawing representatives from a good many of the 33 companies recognized this year.
Working on this first Best Places to Work program for BI gave me an opportunity to see various ways companies strive to create high quality workplaces. And many of the companies had quite a bit in common.
One common element was an emphasis on the company's culture. Another was a recognition that creating a great workplace wasn't just good for employees, it was good for clients and, in turn, good for business.
They'll be more about this year's Best Places to Work in Insurance in Monday's BI. And, if you want to sign up to be notified about registering for the 2010 program, you can do so online at www.bestplacestoworkins.com.
Hope to see you at next year's event.
