Captive Owner Profile: Butler University’s student-run captive

Victor Puleo of Butler University tells us about the Davey Risk Management and Insurance Programme; the world’s only student-run captive.

Victor Puleo has been involved in the captive for two years and was placed on the board one year ago. Puleo is the department chair for risk management and insurance, and the Davey chair of risk management and insurance. With the departure of Zach Finn, who founded the Davey Risk Management and Insurance Programme in 2017, Puleo is currently also serving as the interim chief operating officer (COO) and chief risk officer (CRO), with Butler University looking to appoint someone to these positions full-time ahead of the new semester.

The Davey Risk Management and Insurance Programme is one of a kind and remains the world’s first and only student-run captive.

Victor Puleo (VP): This is a student run insurance company similar to a student managed investment fund. But there are hundreds of student-managed investment funds across the world where students are given a portfolio of money and make investment decisions. This is the only captive insurance company where students actually choose which risk to put into the captive, and price and underwrite that risk.

Butler students therefore take a very active role in managing risk and the captive as students, and this is why we talk about the Davey Risk Management and Insurance Programme being the only student run captive because it is literally run by our students.

The captive is domiciled in Bermuda and under the licence of the Bermuda Monetary Authority, one of the biggest domiciles in the world.

We have a captive management group out of Bermuda that includes the captive manager and the actuaries. This is also where we put our investments. While the day-to-day operations of the captive reside in Bermuda, the decision making is done in conjunction with the faculty, students, the board, as well as the chief legal counsel and the chief financial officer of Butler University. The arrangement is again somewhat unique since the academic side of the university is actively involved with the business side of running a university.

Currently, and since its inception in 2017, three lines are covered in the captive: product liability, fine arts, and perhaps one you wouldn’t suspect a university to have: animal mortality.

Three dogs are written for animal mortality. The first is our live university mascot, an English bulldog named Butler Blue. Since mascot Butler Blue was donated, the cost of the dog is not what he is covered for. It’s the training and expense to take the puppy and make it a full blown mascot, able to fulfil duties such as attending events and delivering acceptance letters to students who’ve been accepted to Butler University. If something happens to the dog, we can get another dog, but then we have the increased expenses of training the new dog and so that’s what we actually provide coverage for.

The second is our bomb sniffing dog named Bear, and the third is Scooter, a therapy dog for students, faculty and staff at Butler University. In contrast to Butler Blue, Bear is covered due to the fact he is an expensive dog, which is already trained, and would have to be replaced if something happened to him. Bear if therefore the highest value dog covered through the captive, with Butler Blue and Scooter second and third highest value respectively.

The students have to determine these different valuations and then the pricing so each dog can be put into the renewal for the package policy,” said Puleo.

The other lines pertain to Butler-branded products and fine arts owned by the university. They undergo the same pricing valuations as the three Butler dogs.

Business students at Butler are introduced to the mechanics of captives early on. And with its focus on experiential learning, managing risk through the captive is implemented into the syllabus.

We have a specific course that the students take in the spring term where they get involved with underwriting, pricing, and risk assessment. They even do some loss control.

The end result and deliverable from this class is the policy renewal package, which is presented to the board, as well as a pro forma income statement for the captive.

We are nationally recognised for our experiential education as students apply that experience and what they learn right away in and out of the class. And that makes them much more adaptive thinkers and better problem solvers. It’s not simply just taking classes and taking tests. We are very much focused on the experiential approach to learning, and the captive is a key part of this ethos for our business students.

One example of experiential education at Butler in the Lacy School of Business is something called the real business experience, or RBE, class. All the undergraduate business students are required to take the RBE class having been introduced to the concept of risk management and insurance earlier in their academic careers as sophomores. There are approximately a thousand undergraduate students in the school of business in just one year. Students form teams, create a business idea, apply for funding for the business from the university and start running their own business.

Once a team develops a business idea and creates a business plan, they apply to receive up to a certain dollar amount of funding from the Lacy School of Business that helps them get their business started. Any profits they make in excess of the loan, the team gets to keep.

Before receiving approval and securing a loan, each team is provided with a risk assessment survey. Whatever the product may be, the students have to complete the survey and go through the underwriting process with the CRO and the captive.

From here, our undergraduate students must receive a certificate of insurance, just like one would have to do in any business in order to sell a product. Before the loan gets approved, the students must receive the certificate of insurance, so this forces the teams to learn about risk and insurance early in their academic career by completing the risk assessment survey, going through the underwriting process, and learning what risks are associated with their specific products.

Last year there were around 70 teams, so 70 different products were insured through the captive. The insurance provided through the captive for these products is product liability but does not include legal expenses. The university provides the legal expenses and we only pay for judgements and settlements.

The future of the captive is promising, with Butler planning to add new lines of coverage and grow premium over the next few years.

The captive is currently very stable and financially sound, but what we need to be looking at in the future is premium growth. This will come from adding additional lines of coverage. We want both our undergraduate students and our graduate students to be involved in helping to expand beyond the three lines of coverage that are currently being written through the captive in order to grow premium. Typically for a captive like ours to make sense, it needs $750,000 to a million dollars of premium. We have not yet reached this mark, and so our goal is to grow the captive premium to somewhere within that range over the coming years.

5-6 November 2025

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