RANCHO MIRAGE, Calif. – Risk managers with captive programs must negotiate early with the insurance markets and collaborate with their carrier partners, experts say.
“You can never have enough information,” said Jennifer Guidry, Hartford, Conn.-based divisional vice president of business development and marketing alternative markets at Great American Insurance Group during a panel session Monday at the Captive Insurance Companies Association 2023 International Conference.
Captive managers must negotiate early and focus on preparing and understanding how their insurance partner is structured, Guidry said.
Working with others to understand how they’re structured is “an important piece of critical information,”
; because in that negotiation process, “it’s going to play out in terms of how they view pricing fees and their expense structure, which is obviously important to you, ” She said.As captivity, managers assemble their captivity, coverages and advisors, asking questions to determine whether insurance partners have the product filings they need is also important, Guidry said.
Good conversations start with collaboration, says Adriana Scherzinger, Chicago-based vice president, head of inside sales and execution, US National Accounts and Middle Market, at Zurich North America.
It’s important that insurers consider the limits, claims history and risk mitigation factors that the captive and customer have implemented, along with any changes in the regulatory environment, she said.
“We look at financial information, the parent company’s financial risks and the financial risks with captives. This is really integrated with credit risk decisions,” Scherzinger said.
Timing is “a keystone” to negotiating in the captive space, said David Raymond, vice president of specialty group captives at The Travelers Cos. Inc. in Hartford, Connecticut.
Negotiating with captive clients is much more akin to a family than a business relationship, he said.
“You can have negotiations with your spouse and you can leave the room and not be happy with that negotiation, but you’re expected to come back into the room at some point,” Raymond said.
“That thought process of how do I get into this conversation really drives the rest of the conversation. If you don’t prepare for that, you’re going to be woefully underrepresented in your own position,” he said.
Trust and active listening are also important, to make sure customers are getting what they need, he said.
Seeing insurance companies as partners working with you is important, Guidry said.
“I’ve had times where different captive owners have come in and conceptually had an idea that they wanted to put together. We were able to engage as a partner by bringing in expertise,” she said.
Building partnerships with insurers, with their front-end arrangements and brokerage teams all play a role in helping ensure that risk managers are doing a good job with their captives and for their organization, said Theresa Severson, Aurora, Illinois-based vice president, insurance and risk, at Kite Realty Group, who moderated the session.
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