Rich Smith, president of the Vermont Captive Insurance Association, introduces the Vermont Report 2016.
This year, Vermont celebrates the 35th anniversary of the signing into law of the Special Insurer Act which launched the state into forefront of the captive insurance industry. In 1981, then-governor Richard Snelling’s vision was to create a premiere captive insurance environment that would rival off shore competitors and to create economic opportunities for Vermonters. I think he would proud, and maybe a little bit surprised, just how successful that initial launch has become!
The strong political support through the years, along with expertise, infrastructure and innovation has kept the State of Vermont ahead of the curve. To date, Vermont has 1,071 licensed captives with 589 currently active making it the largest captive insurance domicile in the US and the third largest in the world. Vermont captives wrote more than $27.5bn in gross written premium in 2015. Today, 48 of the Fortune 100 and 18 of the Dow 30 have Vermont domiciled captives.
The captive industry infrastructure that’s developed in Vermont over the past 35 years — the regulators, managers, accountants, auditors, attorneys, investment professionals, and others, as well as the Vermont Captive Insurance Association — is what has helped catapult Vermont into the vanguard of the industry. The infrastructure in Vermont is second to none and has always been one of our greatest strengths. With over 450 member companies, VCIA is the world’s largest trade association for captive insurance, continuing to earn its reputation as an innovative, efficient and effective organisation on many levels, as well.
The captive industry has grown geometrically over the last 35 years or so, with an estimated 6,000 captives worldwide. And it’s not just the number of captives that have exploded: originally set up to cover basic commercial property and casualty, the lines of risk now put into today’s captives boggle the mind. From employee benefits to cyber risk, the utilisation of captives seems to be only limited by the imagination of captive practitioners.
For me, one of the most exciting things at VCIA’s annual conference is to hear from the experts in the field on the new and remarkable products and ideas percolating in the captive world. Over 1,000 people from around the world come to the beautiful small city of Burlington every summer to hear the very best and brightest professionals in the industry discuss changes, innovations and challenges to their organisations and the industry based on their own hands-on experiences.
Captive insurance is an ever-evolving space, rich with the opportunities and innovation that are the hallmarks of the industry. Change is a constant, and over its decades-long history, the Vermont industry has seen and learned plenty, and has frequently blazed a trail for the industry’s way forward.
VCIA is proud of its role as the leader in the captive insurance industry. We will continue to work hard and never rest on our laurels. The next 35 years is bound to be as dynamic and exciting in the world of captives as the last 35.