Jamey LeBlanc, executive vice-president of risk management services at Captive Resources, speaks about his unique experience and perspective on group captives, which remain prevalent in Cayman
Captive Review (CR): Your career history is somewhat unique in that you’ve spent time as both a captive owner and a captive service provider. Tell us about yourself and your professional background?
Jamey LeBlanc (JL): I’m a chartered professional accountant and had my first exposure to risk management and insurance through financial audits of property and casualty insurance companies. I joined a family-owned manufacturer and distributor of consumer products in 1999, and stayed there for 22 years. The majority of that time I was directing risk management and insurance. The company currently has nearly 1,000 employees spread across 15 states, using hundreds of vehicles. During my time with that company, it joined a heterogeneous group captive advised by Captive Resources. Major risk exposures included employee injuries from working both on-premise and at third-party locations as well as significant auto liability exposure from a large fleet. Today, as executive vice-president of risk management services at Captive Resources, I have responsibility for the risk services group. This role encompasses pre-loss risk control and our claims services department for post-loss management to captives and their member companies.
CR: How did the company come to be a group captive member? What was the decision-making process like?
JL: When I joined in 1999, the company was in the traditional insurance market and frustrated with increasing premiums, especially when they were driven by hard markets instead of our own loss performance. We considered ourselves better than average on safety performance. We began to evaluate the group captive option and worked through that process over about a year before we made the decision to join. We thoroughly evaluated the captive including cost/benefit forecasts at different loss levels. We worked through various questions we had with our broker, with the assistance of Captive Resources. After joining the captive, the benefits became clear and we eventually came to the conclusion that we wished we had done so years earlier.
CR: What was your experience as a captive member like?
JL: We performed well in risk management but had work to do in improving our safety programmes once we joined the group captive. Beginning in about year five, we began to experience years of healthy dividends – that is, we were outperforming our actuarial loss projections. The unused portion of our loss funds was returned to us. This helped to reduce our insurance costs. While we were in the captive, the business grew quickly, both organically and by making acquisitions to expand our distribution. With this fast growth our workers’ compensation and auto incident frequency increased significantly over several years. In 2007, the captive’s risk metric tracking triggered us to be placed on its risk control support list. This is the list of members in a captive that have a ‘worse than average’ loss experience and need extra support and focus to get back on track.
CR: How did the company react to its deteriorating loss experience?
JL: We changed our safety management structure. We created a risk management department that joined safety, claims management and insurance management. I became the company’s first risk manager leading this function. We used placement on the captive’s risk control support list as a ‘call to arms’ among our supervisors and employees and it ended up being a tipping point to better performance. We reconnected with our captive’s risk and claims consultants to use the many resources that we had available to us through the captive. This helped evaluate our loss trends, improve our safety programme and better manage our claims.
Other actions included:
- We addressed gaps in our safety programme with the help of our consultant.
- We attended our captive’s risk control workshops.
- We increased our engagement in supporting the third-party administrator managing our claims and in-claim reviews.
CR: Can you explain more about the risk control workshops and claims reviews you mentioned?
JL: Our group captive’s risk control workshops provided immense value through educational sessions on safety and claims topics, networking with other members of the group captive with similar risk profiles, and building relationships with our safety and claims vendors. Claim reviews brought together our third-party administrator/adjuster, broker, legal counsel and Captive Resources’ claims service managers for discussion and progress on claims.
CR: Ultimately, what was the result of the company’s renewed efforts?
JL: Within three years we returned to a great loss performance and were a risk control award winner within our group captive for several years. This experience reinforced the value of the group captive, and I became even more passionate and resolved that it was a great business solution for managing risk. I spent several years as the risk control chair of the group captive.
CR: It sounds as if your company’s experience as a captive owner was rewarding. What was it that prompted you to move your career in another direction?
JL: After 22 years with that member company and 20 years working with the Captive Resources professionals dedicated to our captive, I came to the decision that it was time for a new challenge. I obviously have a passion for risk management and appreciate how great of a solution we have here with captive insurance. When the opportunity arose, joining Captive Resources in a risk management role was the perfect answer. In my new role with Captive Resources, I expect to always be able to bring a member-owner’s perspective to the risk management services provided to captive members. It’s an exciting time to be working in group captives because today, instead of an alternative, group captives have become a desired risk management vehicle for safety-minded, mid-market companies who want to gain control over their costs while benefiting from their performance. So there’s lots of growth ahead.
Captive Resources says that LeBlanc’s experience illustrates a familiar story arc for group captive member companies: a safety-conscious company joins a group captive — the captive provides extensive risk management resources and support — the company further develops its risk control and safety programmes and sees substantial performance improvements. The following case study provided by Captive Resources shows how that storyline played out for a long-haul trucking company. When this firm joined a group captive in 2014, it had risk-control programmes in place, but there was room for improvement. With the support of the captive, the member-company made substantial improvements to its risk control and safety programmes, achieving the following success: • 11% increase in its Fleet Risk Control Assessment (FRCA) scores: The FRCA is an in-depth review of risk control policies and procedures compared to industry best practices. The company achieved improvement despite the captive introducing a more stringent assessment in 2019.
- 88% improvement in Unsafe Driving (U-Driving) Scores: U-Driving is a metric that grades motor carriers related to Unsafe Driving violations.
- 80% improvement in loss ratio: The combined loss ratio (workers’ compensation, general liability, auto) at the end of each policy year.