Kirk Watkins | Promethean Risk Solutions

Kirk Watkins talks to CIT about Promethean Risk Solutions’ unique programmes which redistribute profits back to clients. He also discusses how the company utilises its captive ‘FairShare’

Can you explain the core mission of Promethean Risk Solutions and how it aligns with the name “Promethean”?

Promethean Risk Solutions is named after the ancient Greek Titan Prometheus. In Greek mythology, Prometheus took fire from the gods and bestowed it upon humanity in the forms of technology, knowledge and civilisation. With a nod to Prometheus, the essential mission at Promethean Risk is to help organisations capture profits traditionally retained by insurance carriers and redistribute them back to their own organisations and people.

Our mission is to create “win-win” risk financing solutions by utilising supplemental insurance programmes to create state-of-the-art and profitable third-party insurance programmes. These solutions are customised for each client. They are designed to give policyholders enhanced coverage at lower costs, while the sponsoring organisation generates new capital.

We work with partners and clients to co-create programmes that will best serve them. Whether their policyholders are employees, customers, contractors, tenants, students, franchisees, or association members. The benefits offered may change, but the mechanism is the same throughout. They are all unique, profit-sharing solutions funded by the policyholders. The sponsoring organisation earns 100 per cent of the net profits.

Like the Titan Prometheus who shared vital resources with all of humanity, the new capital generated can be used to fund further risk financing programme enhancements that will continue to benefit all parties. Fun fact: The word ‘promethean’ also means ‘foresight’ and ‘rebelliously creative and innovative.’

Could you provide an overview of the distinctive reinsurance programmes you’ve developed throughout your career? What motivated you to concentrate on reinsurance?

I have always been committed to creating insurance products and programmes that benefit both the policyholders and the sponsoring organisations. I enjoy working with large organisations with a high number of stakeholders and developing unique insurance solutions that create large positive impacts, both financially and through enriching people’s lives.

Whoever the stakeholders are, there are so many possibilities via unique profit-sharing solutions to create win-wins.

Consistent with that ethos, I created BeneCap and TechProtect during my time as captive insurance programme leader at the Marsh McLennan Agency. These programmes brought and continue to bring significant value to the market.

Our team’s focus with Promethean is to develop innovative, best-in-class voluntary benefit reinsurance programmes focused on providing tailored coverage for employees or other stakeholders — reducing costs while improving coverage.

These reinsurance programmes are unique because they are fully transparent regarding coverage, costs and profits. Important data points are available for the policyholder and the sponsoring organisation to see. This lowers claims disputes and creates goodwill within organisations.

The programmes we create draw from a full menu of supplemental coverages for a wide range of needs. Coverage examples include hospital indemnity, critical illness, accident insurance and others that can be hard to find or expensive on the open market — items such as identity theft coverage, legal, rental liability waiver and pet and tenant insurance.

This is in addition to integrated electronic device coverage, including smart phones, tablets and all the devices within a household. Programmes are custom created depending on the stakeholders’ needs. Offering bespoke coverage increases stakeholder participation, reduces the cost of workers compensation programmes, and can potentially provide captive insurance tax benefits.

Your team boasts over 200 years of collective experience. How has this wealth of experience contributed to your success of devising solutions for intricate risk management challenges?

We like to say that Promethean Risk Solutions boasts the highest combined captive insurance IQ in the industry. Each member of our well-known and highly respected professional team has deep knowledge, experience and insight into various aspects of the captive insurance, reinsurance and employee benefits industries.

The team provides state-of-the-art advice and counsel on compliance, captive insurance programme development and management, medical stop-loss, reinsurance and connections with a broad range of potential clients. We are a trusted partner for our clients and represent a creative, flexible and nimble organisation poised to create positive change.

Could you elaborate on the concept of your highly customisable profit-sharing solution and how it enables organisations to retain profits traditionally taken by insurance carriers?

Commercial supplemental insurance programmes are very profitable for the carriers. Typical loss ratios are in the 25 to 35 per cent range. This provides an opportunity for the programme sponsor to work with Promethean and directly offer its stakeholders supplemental insurance programmes which offer improved coverage at a lower cost.

The policyholders pay 100 per cent of the cost of the supplemental coverages purchased. The lower costs and improved benefits build stakeholder goodwill. The fronting insurer earns a fee for administration, underwriting and managing claims. The front cedes all or a portion of the risk to FairShare, Promethean’s captive insurance company, and 100 per cent of the net profit is returned to the programme sponsor. FairShare can retrocede the risk to clients that have their own captive.

Promethean does not offer general liability, property and casualty, workers’ comp, or core medical coverages. We focus only on profitable supplemental lines of insurance for employees, tenants, contractors and students, among others. We are the go-to source for innovative, profitable third-party insurance programmes.

An important distinction for us is that we partner with all brokers, consultants and captive managers. We do not compete with them, we become part of their team and help them identify and develop optimal solutions for their clients, organisations or captives.

Could you explain how your captive insurance company FairShare benefits both organisations and their employees?

FairShare reinsures the risk from our clients’ employees, members, tenants, franchisees, students or customer insurance programmes. It provides the same benefits enjoyed by captive owners utilising predictable, low-risk, profitable third-party programmes to organisations without a captive insurance company.

There is no need for our sponsor organisations to own their own captive, join a group captive or post collateral or capital; this is a helpful differentiator. Instead, sponsor organisations are able to utilise FairShare and access the same benefits as a captive owner and participate in FairShare’s profit sharing at no risk.

FairShare can also be used by sponsor organisations that choose not to invest the additional capital needed to support these coverages in their own captive. For captive owners who want to use their own captive to reinsure the risk, Promethean will retrocede the sponsor’s share of the risk to its captive.

Folks have heard me say many times: “it’s a win-win-win for all parties.”

The benefits include providing policyholders with better coverage at lower costs. This is in addition to empowering policyholders through greater control over programme design and offerings, as well as creating a way for sponsor organisations to attract and retain ideal people, boosting profitability and stability. It can also generate additional capital with low-risk, predictable business.

How does Promethean assist organisations that don’t currently have captives to participate in your programmes? Could you elucidate how your captive, FairShare Insurance Company, fits into this?

We work with a client and their insurance broker or captive manager to develop profitable third-party insurance programmes using FairShare. Promethean’s FairShare Insurance Company reinsures the policies issued by the fronting carrier. We target a conservative combined ratio of 85 per cent to allow for lower costs and increased benefits for the policyholders.

We also have parties interested in using FairShare to become familiar with how captives work, prior to forming their own captive. It is great to know that we are able to help the captive community and bring more companies into the industry.

Your team includes esteemed professionals like M. Michael Zuckerman, who’s an associate professor in risk and insurance management. How does the expertise of such individuals shape the services you offer?

Knowledge and experience are powerful assets. Our team is growing and each member brings extensive expertise to the table.

Professor Zuckerman brings a unique perspective because he advocates tying an organisation’s risk identification or assessment process to the development of economically efficient captive insurance programmes.

Gary Osborne has implemented and managed a myriad of captive insurance programmes. David Provost and Michael Corbett know first-hand what programmes work and which don’t because of their significant captive insurance regulatory experience.

Courtney Claflin is a captive owner who is very innovative, has built bespoke captive insurance programmes and understands Promethean’s proof of concept firsthand. Our most recent addition, Fred Anton, brings over 30 years of reinsurance experience to the team.

Promethean was honoured to receive a 2023 Business Insurance Innovation Award. We will continue to grow and provide excellence in all we do.

What benefits do organisations and their employees enjoy by participating in your programmes, both from an insurance coverage perspective and in terms of revenue generation?

Benefits include the improvement of stakeholder attraction and retention, boosting profitability and stability — it means happy customers, tenants and employees. It reduces costs and improves productivity, which grows organisational value.

It provides stakeholders with better coverage at lower costs; stakeholders are empowered through greater control over programme design and offerings, and could retain more disposable income to be used for other purposes.

It generates additional capital for the sponsoring organisation with low-risk, predictable business and can transform the organisation’s captive into a central profit hub within the enterprise ecosystem.

The notion of transforming captives into profit centres is intriguing. Can you provide an example of how a company has successfully achieved this transformation with Promethean’s assistance?

Yes, we are currently working with a very large real estate firm with tens of thousands of apartments. It had only been offering renters liability and deposit waiver programmes.

We presented a solution to offer additional programmes including ID theft coverage, group auto and home, pet insurance, electronic device coverage and pre-paid legal coverage to its tenants.

These programmes provide better coverage at lower premiums than the tenants could purchase at retail, which creates goodwill, enriches lives and attracts and retains tenants.

Additionally, when the tenants move, the coverages are portable.

Therefore, within a few years, the landlord or lady will have a book of millions of dollars in ported policies, this will create a recurring revenue stream from previous tenants.

Looking ahead, what are your future aspirations for Promethean Risk Solutions? What impact do you hope to have on the risk management and employee benefits landscape?

Our vision is to become the industry leader of profit-sharing insurance solutions and to be the go-to source for innovative, profitable insurance programmes. We will continue to innovate to serve the needs of our clients and partners.

We will continue to partner with brokers, consultants and captive managers — focusing only on profitable supplemental lines of insurance. We work together with our partners and sponsor organisations to co-create the best programmes.

Our leading-edge enterprise risk management solutions are easily scaled, improve stakeholder relationships and add great value to an organisation.