In celebration of its 40th anniversary, Vermont Captive is featuring a series throughout the year highlighting companies and people that service the captive insurance industry.
When asked what is so special about working in the captive industry, Jim replied, “Captive business is the best business”. Jim heard the captive insurance guru, Hugh Rosenbaum, express that sentiment early in his career and is one that Jim Girardin firmly believes – and he should know.
Ten years ago, Jim founded Amethyst Captive Insurance Solutions, joined shortly thereafter by Tara Smith as co-owners. Amethyst is an independently owned and operated captive insurance management and consulting firm located in Burlington, Vermont. Jim is its managing director and Tara the Chief Operating Officer.
Captive managers play a vital role in the captive formation process and continuing operations of the captive. Vermont regulators recommend the selection of an approved captive manager as the first step in the captive formation process. Once a company selects an approved captive manager, the company arranges a meeting through their approved captive manager with Vermont Department of Financial Regulation staff to discuss the proposed captive and obtain initial reactions from the department. The captive manager can help companies navigate the entire feasibility and application process. As the title implies, captive managers are instrumental in the continued operations of the captive once it is licensed. Managers typically provide (or can arrange with specialists) services including underwriting, policy issuance, claims processing, investment management, and regulatory compliance and reporting. Captive managers frequently sit on the board of directors of the captive to provide guidance and to satisfy the resident director requirements of many domiciles.
Before founding Amethyst, Jim was with Willis Towers Watson, the behemoth insurance brokerage firm, for about 19 years. While there, Jim was the second hire of the team that started and grew Willis’ North American Captive Practice, ultimately becoming EVP and Practice leader of the North American and Caribbean Captive Operations. Before that, Jim worked at Ernst & Young and KPMG on both the tax and audit sides, helping to form the firm’s approach to captive insurance auditing. So, Jim has been around the block enough to know what he’s talking about.
What is it about the captive business that makes it the best though? Jim says it’s a combination of things. Every company to one degree or another must deal with a variety of risks to its business and operations. Through advising and managing captive insurance companies for Amethyst’s clients, Jim is able to help these companies protect and responsibly fund their risk and, as a result, help them achieve their broader mission and goals. As Jim says, you can see the outcome that your efforts enable and that’s a satisfying feeling.
There’s also the creativity. Each captive insurance program is designed to accommodate the particular needs of a company, designing and successfully operating a bespoke program is challenging and doing so successfully is fun. Plus, the captive insurance industry is always changing – and fast.
New industries and the risks attendant are arising all the time. Cryptocurrency, emerging technologies, cyber, and artificial intelligence are examples of new economy industries presenting unique new risk profiles. Change is the one true constant that goes hand in glove with designing and operating captive insurance companies. It’s this customization and willingness to continuously change that demands creativity, which Jim says keeps our business so interesting.
Of course, there are also the people that make the industry so enjoyable, Jim adds. There are many types of businesses needing captive insurance. Partnering with them and learning about their businesses is something he finds immensely enjoyable. And, there’s the other service providers and regulators. We have such a diversity and depth of thought and talent in the industry, particularly here in Vermont with its strong presence as a captive domicile. There’s a real collegiate feel and it’s exciting to collaborate, exchange ideas, and work together to find innovative solutions for our clients.
Speaking of Vermont, I’d be remiss if I didn’t mention how lucky the state is to have the captive insurance regulators that it has. Actually, while “regulators” first, the VT DFR captive team in Montpelier are equally “problem-solvers.” While firm and fair in ensuring regulatory compliance, they do not readily just say no immediately when a thorny issue presents itself during the formation or business planning process. Rather, they work with the captive owners to find a solution if there is one. The captive industry is a great example of what a successful partnership looks like between the public and private sectors and their work toward mutually agreeable goals.
Just because it’s the “best business,” however, doesn’t mean there aren’t challenges. One of the biggest challenges today, Jim says, is attracting new talent. The industry players are aging, and there aren’t as many younger folks coming up through the ranks as he’d like to see. That could be due to a perception insurance is dry. Jim admits that the word “insurance” doesn’t exactly bring to mind a lot of excitement. He feels that’s a misperception though. In addition to creativity, innovation, and helping businesses achieve their goals (many of them being very mission-driven), you are able to work with the C-suite of sophisticated national and global companies and, unlike other industries, that can happen at an early stage in your career. Jim thinks that’s exceptionally appealing in a setting like Vermont, where you get the best of both worlds – interesting work in a beautiful environment. Jim thinks that it’s really more about educating younger people about the opportunities the captive industry offers. He notes the Vermont Captive Insurance Association and some of the other captive insurance trade associations have identified this reality and continue to work on and build upon their efforts to market our business moving forward.
This year, Amethyst will celebrate its tenth anniversary of managing captives in ten states. Jim and the Amethyst team take immense pride in that. Amethyst was the first VT authorized independent captive manager that started without third-party capital owner backing. While Amethyst experienced some early pauses in growth, the firm continued to invest for the future, kept a super-charged positive attitude in their ability to deliver high-quality service and the network of clients and partners keeps growing and strengthening. Jim and Tara know the formula for achieving 100% client retention is grounded in the basics of nurturing the team, staying relevant and always being ready for clients that present with some of the most complex risk situations and profiles in the industry. The Amethyst team seems well positioned for the future.
Happy tenth anniversary, Amethyst. Looking forward to seeing what the next ten years bring.