Although the captive insurance industry has ramped up its efforts to attract the next generation of young professionals, challenges around lack of education and myths about the market remain
With the combination of the hardening commercial market and the impacts of the COVID-19 pandemic, the self-insurance market has seen plenty of growth over the last 12 months.
Although the stars appear to be aligned for the captive insurance sector, one of the challenges facing the industry is the ongoing talent crisis.
The biggest challenges with attracting the next generation of professionals can largely be put down to myths about the insurance industry as well as a lack of education about this sector too.
Anne Marie Towle, global captive solutions leader, Hylant, explains: “Many individuals don’t understand the captive industry specifically, therefore we need to educate people.”
Towle highlights that there is also a lack of diversity. She says: “As an industry we need to change the perception and change reality by attracting more diverse talent from various backgrounds.”
But is enough being done to feed the younger generation knowledge on the captive insurance sector?
Karen Hsi, programme manager, captive programmes, University of California Office of the President, suggests that being an innovative sector of the insurance industry, the captive market is not widely publicised and “gets lumped into the larger market of traditional insurance jobs”.
Younger millennials and Gen Z have grown up in a unique time as they have been surrounded by and exposed to technologies since the first day they were born. Hsi explains that this is a technologically advanced generation and insurance is not often viewed as a modern, technology-focused career.
She notes that the captive insurance sector is not “attractive enough” to compete with some of the big name, fast growing technology companies that most of the next generation are familiar with and would dream of working at.
The industry is also not emphasised enough as a niche industry that provides so many growth opportunities for young professionals to embrace, Hsi adds.
To help address the talent crisis, initiatives such as the Captive Insurance Companies Associations (CICA) NEXTGen has been launched to encourage young professionals to connect with others in the industry and develop succession planning.
Discussing CICA NEXTGen, Nate Reznicek, head of US distribution at International Re, argues that from his personal experience the programme has been “incredibly valuable to me as a mentor and feedback from the mentees has been quite favourable as well”.
The NEXTGen is composed of captive owners, service providers and domicile members.
Alongside CICA, other firms within the market have also actively engaged with colleges and universities for recruiting new staff. One of those is Hylant.
Towle explains that the company is hiring interns to develop their expertise, expose them to the industry and grow possible talent for the captive industry.
“It needs to be more vocal to young professionals, college students and high school students about the benefits of a career as a captive professional,” she adds.
As part of its work to promote the captive insurance industry within university and colleges, CICA also launched an essay competition targeted at US college students.
The prizes include a cash prize, an invitation to CICA’s conference and the winning essays to be published in Captive Insurance Times.
For its 2021 competition, CICA received essay entries from students studying accounting, business administration, finance, insurance and risk management.
Captive Insurance Times also runs an Emerging Talent section in every issue of its magazine to promote a young person that works in the captive industry.
What’s on offer?
Even with the initiatives that already exist, is there still enough being done in the sector as a whole to address this issue?
Towle says: “Simply, no, I believe more can be done to attract young professionals with a grassroots outreach programme.”
“We need our industry advocates, representative organisations, and insurance educators to do more, share more and encourage the benefits of a captive career,” she explains.
The captive industry has offshore and onshore locations for exploring opportunities, whether as an accountant, investment advisor, attorney, insurance broker, captive manager, the list is endless for a captive industry professional.
There are over 100 domiciles that license and regulate captives around the world along with the majority of US states.
Reznicek believes coordinating efforts among differing captive associations would be a great way to amplify the messaging of the industry and significantly increase outreach capabilities.
“State and regional captive associations could host more localised essay competitions with regional winners being decided on an international state at the CICA annual conference,” he explains.
But what does the captive insurance sector have to offer a new generation of workers?
A recent study found that 74 per cent of millennials who like their jobs plan to leave within the next three years.
However, the same study also found that 89 per cent of millennials said they would stay with the same company for 10 or more years if just two criteria were met: opportunities for upward career mobility and a regular increase in compensation.
Hsi highlights that there are plenty of growth opportunities in the captive industry, with positions to grow into and exploration of new areas of expertise to develop and mature.
She says: “The emphasis on this being an industry where you can ‘make the career what you want it to be’, is a huge benefit to working in this creative sector and will help to attract and retain talent.”
“The captive insurance industry is so dynamic and you are exposed to such a variety of professions within this sector, that it can keep someone interested and challenged without having to move outside of it,” Hsi adds.
Mentorship is a very important aspect in certain sectors such as academic, law and art.
Commenting on if mentorship is important for young professionals in the captive sectors,
Reznicek highlights that aside from the captive industry, mentoring relationships are critical components to the success and longevity of any career.
He explains: “The sheer number of different professions and sub-industries that intersect in captives can be head-spinning for even seasoned professionals.”
Relationships formed based on collaboration and shared respect for the knowledge and experience of both parties can significantly benefit the careers and personal lives of both mentor and mentee alike.
Eyes forward
Even though the talent crisis has been addressed by the industry and is resulting in initiatives to draw in a younger generation, there is still a lot of work that needs to be done to make the younger generation aware of this very niche sector that is currently experiencing growth.
This work needs to be done sooner than later as even if new young members join, they need to be able to gain the experience before they can take over from those that exit the market.
Moving forward, Towle highlights the need for more education for all generations to increase the emphasis on brandings, such as a multi-disciplinary career and the opportunity to innovate within the captive insurance industry.
She comments: “More organisations need to offer interesting, exciting, and paid internship opportunities for students. If you do that, you can hire top talent. We were able to do that with a top student from Butler University.”
Meanwhile, Hsi suggests that promotion and education in the captive industry should be starting earlier.
She says: “Engaging younger high school students in ‘career days’ can be a step towards sharing what life in the captive insurance industry could look like. I think many times the key to recruiting someone out of school is as simple as sharing your story or experience. What your personal journey has been like going into insu
