Cayman Captive Forum targets generational advantage

Generational Kinetics, the study of how generational behavior and trends will influence future society and business, takes top billing at the 2015 Cayman Captive Forum, the biggest conference of the year on Island. Over 1,500, mostly international delegates, attended last year’s Forum, and organisers expect even more this year. “Our registrations are up again this year, so we’re expecting another record year, to top 2014,” said a spokesperson from the Insurance Managers Association of Cayman (IMAC).

Key note speaker Jason Dorsey of the Center for Generational Kinetics, who is known for his high energy style, will explain how the attitudes of Millennials, otherwise known as Generation Y (people born between 1977 and 1995), differ from both previous generations and also the new Generation Z, or iGen, which currently includes people aged around 20 and below. Dorsey says he is “pumped’ to come down to Cayman and intends to “rock the house”.

Generational studies has become a hot issue for international business because the almost 80 million Millennials in the US represents the fastest growing demographic and this year overtook Generation X in terms of numbers in the workforce. Millennials are also the largest group of consumers, and as these customers will bring the largest lifetime value, leading corporations are listening to what people like Dorsey have to say and how that can be applied to sales, marketing and unlocking Millennial talent in the workplace. IMAC said the topic of Generation Y in the workplace is particularly timely these days and very much so in the healthcare field (which is a major component of Cayman’s captive industry), so delegates can expect to gain a lot of useful insight from Dorsey.

Minister Wayne Panton will provide an update from the government, which has supported the industry with new legislation since the Captive Forum was last in town. The Portfolio Insurance Company (PIC) regulations brought in at the start of 2015 have been well received locally. The PIC regulations bring more flexibility to Segregated Portfolio Company (SPC) captives, which allow various participants to come together under one umbrella in a kind of Rent a Captive scheme. Each company’s assets and liabilities are ringfenced as separate cells within the SPC. The PIC enhancements gives these cells a separate legal identity, allowing them to contract with other cells and share reinsurance arrangements, for example.

Following a presentation of Global Risk Trends, examining captive use today, local hero and Campbells partner, Guy Manning, will speak about his Seven Summits Challenge to climb the highest mountain in each continent.

Cindy Scotland, MD of the Cayman Islands Monetary Authority (CIMA), will give the regulator’s perspective on Day Two of the main conference. Other programme highlights include ‘Catastrophic Cases: Understanding the Psychology that leads to Super Losses’ and ‘Hollywood Hacking vs Your Organisation’, which highlights the growing cyber risk and concerns over incidents of data breach. Other sessions focus on healthcare captives, capitalisation methods for captives, as well as analytics and investment returns.

The captive sector is experiencing a soft market, which has seen a modest decline in the number of captives in Cayman. The drop-off is accentuated on the healthcare side as an unfortunate side effect of the ObamaCare healthcare revolution in the US. The Affordable Care Act encouraged consolidation among US healthcare providers, who are now rewarded financially for achieving improvements in efficiency. As hospitals and medical facility groups have merged to achieve economies of scale, some of their previously established captives have become redundant and closed. However, industry participants are quick to point out the captives that remain will have more assets and will write more business.

Much of Cayman’s success in the captive arena is down to the deep expertise and strong relationships with the US healthcare industry, which will be out in force at this year’s conference. This market knowledge is held in high esteem by US captive clients, who say that no other jurisdiction understands the complex mechanisms in the US healthcare market like Cayman does. Cayman has been servicing the US healthcare industry since the 1970s and while a greater number of captive domiciles come on stream, offshore and onshore, some of these jurisdictions are still just figuring out how to regulate, captive managers here say.

Competition is increasing as more US states add captive insurance to their company law capability. The onshore jurisdictions are led by Vermont, according to Captive Review, which had 581 captives in December 2014, compared to 723 in Cayman and 800 in Bermuda. Delaware, which has 333 captives, has raised its profile in this sector with the introduction of Series Captive Insurance Companies, which provides easy entry into the business of setting up a captive.

Other issues that captive market participants are dealing with, include concern over increased regulation, with some questioning the relevance to the captive sector of certain CIMA initiatives and recent changes to the Companies Law. Clients who have been using Cayman for a number of years say they don’t want to get to the stage where additional costs upset the balanced approach to regulation that brought them here.

While on island for the Forum, many captive owners and directors will take the opportunity to hold their annual board meetings and IMAC noted the important contribution this conference makes to the local economy, with the Ritz Carlton, Westin and several other hotels fully booked.

“The Ritz has told me that their reservation numbers are up on both sides of the Forum this year, which is an indication that our attendees are coming early and staying late, which is a plus for the island,” the IMAC spokesperson said.

The conference takes place December 1 to December 3 at the Ritz-Carlton, Grand Cayman.

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