BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Captive insurers strengthen business resilience: Plumeri


MIAMI—Resilience is more important than anticipation for businesses, Willis Group Holdings P.L.C. Chairman and CEO Joseph J. Plumeri told the 2012 World Captive Forum on Tuesday, but without a captive insurer a company's resilience is limited.

Giving the keynote presentation at the World Captive Forum at the Doral Golf Resort & Spa in Miami, Mr. Plumeri said, “I believe the whole world today is about anticipation vs. resilience,” adding that he considers resilience the more valuable attribute because “I don't believe anything is predictable.”

“As the CEO of a company, I have to be really resilient because I don't know what's coming at me next,” he said.

“Resilience acknowledges that the future is unknowable,” Mr. Plumeri said. Resilience also relies on decentralized decision-making and builds organizations and allows them to bounce back from adversity, he said.

Captives, Mr. Plumeri said, are an example of both anticipation and resilience, beginning as an exercise in anticipation as risk managers looked for an alternative to traditional insurance markets, then created business resilience as they became a tool for their parent companies to manage an unreliable insurance market and respond to changing exposures.

Today, businesses need captives more than ever, he said, because the risks they face are changing not only in severity and frequency but also in kind. In a world of unknowable emerging risks, a captive allows companies to control their own destiny and deal with changing market forces, Mr. Plumeri said.

Saying that “resiliency is about managing extreme events,” Mr. Plumeri noted that it’s a more essential attribute than ever if a business is to succeed in an “age of black swans.” Citing surveys indicating business leaders’ concerns over exposures such as loss of customers, regulatory investigations, reputational risk, and talent and skill shortages, he noted those risks are “all difficult or impossible to insure, which demands that you be resilient.”

Insurance is the bridge between anticipation and resilience, Mr. Plumeri said. “I think the insurance industry has got to be more creative than it’s ever been before.”

Read Next