THE CAPTIVE JOURNEY
Hello from the captive front. As we put the finishing touches on a record breaking 2014, there is tremendous excitement about the opportunities that lie ahead in 2015 as more and more companies look to take control of the cost of their insurance program. First a quick review of 2014:
- Cottingham & Butler added more new members/partners to group captives than in any previous year.
- The total dividends returned to our captive clients went over the $90 million mark and is expected to top $100 million in 2015.
- Retention continues to be 99%+ which is a testament to both proper selection of new members and the operations of each captive.
- Member referrals accounted for over 50% of the new captive members in 2014.
There will be new challenges and opportunities in the captive space as we head into 2015. I don’t see any slowdown in the growth of the captives that Cottingham & Butler works with, but do see challenges in sorting through the many qualified companies that are showing an interest in becoming part of a group captive. As captives mature they tend to become more stringent with their underwriting requirements which can make it harder for new companies to qualify. They want new members/partners to be as good or as better than the group of companies that they might be joining to share risk with in order to positively impact the operating results of the captive. The good news is that all of the captives that Cottingham & Butler works with are looking to grow in 2015 and there are plans for new captives to be added to the captive offering in late 2015 or early 2016. It certainly looks like 2015 will be another record year for group captives at Cottingham & Butler.
Until next time…..Happy Holidays and have a prosperous 2015!
Mark Fitzjerrells Sr. Vice President of Captives & Programs Cottingham & Butler, Inc.