← The Edge of Risk Podcast by IRMI
The Edge of Risk Podcast by IRMI
How Do You Know When Captive Insurance Is Right for Your Organization?
00:35:46
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- [00:00]
A
Foreign. Welcome to the Edge of Risk podcast. I'm your host, Joel Applebaum, the Chief Content Officer at army and captive.com Today's discussion is part of Captive Insurance 101 series where we break down the foundational concepts to help you better understand how captive insurance works and when it may or may not be the right fit for you. So joining me today is TJ Scherer, Vice President at Spring Consulting Group. TJ works closely with organizations to evaluate alternative risk financing strategies, including captive insurance, and helps guide them through the decision making process. TJ welcome to the podcast.
- [00:47]
B
Thanks Joel. It's great to be here. Just a little bit about me about Spring. I've been in the industry for about 15 years covering everything from initial captive discussions, applications, captive management, running a team, and on the consulting practice where I am now over at Spring. Luckily, throughout that time I've worked with a bunch of different industries for profit, not for profit, public private ESOPs. So it's really been a fun journey to learn and kind of uncover the uniqueness of every company, which I know we'll talk about throughout the podcast here at Spring. Specifically, we focus on the actuarial and consultative role for clients looking at forming a captive, taking them through the formation process if they go that route, and then ongoing actuarial and consulting. Unlike a lot of firms, we're not a captive manager, but we do assist in the process, so we help clients impair them with the right service providers if they don't have one already picked out. Spring itself has an actuarial team, so that's really my counterpart. When we work through programs and processes with clients, they cover everything from property and casualty, medical, stop loss, voluntary benefits, and pension risks. So it's really fun to work in an organization that can kind of COVID both sides of it all in house and then work with a client on developing a potential solution that's very unique to them.
- [02:09]
A
Great. Well, thank you. Well, let's get started with the fundamentals for listeners who may be newer to the concept. How would you define captive insurance company in a simple term and what role does it play within the organization's broader risk management strategy?
- [02:27]
B
Yeah, Captive Insurance Company is a licensed insurance company. So I think a lot of people aren't sure exactly where it stands, but within a domicile which is either a state or a country, it's a licensed insurer. So you may be licensed in the same state as an AIG or a Zurich and operating under foundationally the same laws as they are. However, most states that are receptive to captives have a different statute that makes them a little easier to operate so you don't have to have a full staff or make a bunch of filings. The insurance company itself, if you're forming a single parent captive or even a cell, is really based on the needs of the insured or the insurers related parties. It can cover property and casualty, it can cover the medical, stop loss, voluntary benefits. You can put a lot within the same captive, and not every company is going to form the same captive. So you're really individualizing it for each company as you're working through the process. That could be also covering or selling insurance to third parties, such as warranty, or if you're in the construction industry, you can put an esop. So really, when you're thinking about how this fits within the company, it is unique as to whether a company is highly driven in, say, a manufacturing role versus one that's driven in a trucking role, because you're identifying the risks and the exposures and the costs that are unique to that company, but really trying to centralize it into one risk management strategy and potential entity that covers those risks and really makes it transparent as to what you're focusing on and driving results out of. Great.
- [04:09]
A
I think that's a helpful context. You know, I think that the central question for today's episode is when one of our listeners to this podcast asks, is a captive right for us or our organization or me, what typically triggers that question? What are the common situations or pain points that lead an organization to start exploring captive insurance?
- [04:34]
B
Yeah, well, as many people are familiar, we're now in the AI generation. And so what that can actually lead to is a lot of initial myth busting where somebody types into ChatGPT or another algorithm. You know, is a captive good for me, or what should I be to form a captive? And it's kind of funny because a lot of the first conversations you could tell if the information was gathered from an online source or through their own research based on, oh, well, I was told I need to be at this size. So a lot of it is really saying, let's, let's just start with what is your pain? You mentioned that. What, what risks are out there? What are you spending on insurance? You know, these captives, if they're not a group captive, are more customized. So we're really digging deeper than just that initial, here's my premium or here's my risk, but what else can we solve for? And so when it's starting to be, is it a right Fit for us, the early conversation is just do you have risks that you feel that are not being covered in the commercial market or do you think that you're overpaying for them? Do you feel like the insurance is now becoming a major line item again, whether that's property and casualty medical stop loss or another line of coverage where you're seeing money walk out the door? So that's really, really the very beginning of it is just starting to say, wow, insurance is becoming a real thing to me now.
- [05:56]
A
Yeah, I want to make sure, since you guys are a sponsor that, and you mentioned AI, that people know that they can go to captive.com for free because of your sponsorship and get right answers vetted by research analysts who are experts in captives and insurance. So, and to build on what you just said, are there certain characteristics, whether financial, operational or risk related, that tend to indicate an organization is a stronger candidate for a captive insurance company?
- [06:29]
B
Yeah, I think that's where I've started hitting on digging deeper. So with Spring's approach, we try and start with a lot of questions. We want to really not take something off the shelf and say which box do you fit into? It's rather what type of company are you? Where is your pain? Do you have the ability to take on more risk? What is your readiness? Do you have the in house knowledge? Are you familiar with captives at all? We talk about a candidate and a lot of it is just, it depends because you may have a client that spends very little commercially but is retaining a lot of premium or retaining a lot of claims that could be converted to premium. Or you may be on a guaranteed cost program and trying to figure out if you can make that move to a risk bearing retaining program through a captive insurance. Generally where we see clients start to look at any captive program is about a million dollars of total cost of risk or TCOR across those lines of coverage. When they're looking at forming their own thing, if they're looking at a group that could be maybe 300,000 to a million, but beyond just what's going on today or the last renewal, we really want to take the approach of looking five years down the road and saying, okay, here you're spending a million dollars today, but what is your plans for the future? And starting to take some of those characteristics into account as we determine, are we continuing on this path or is this something we should pause and come back and visit in the future?
- [08:01]
A
Yeah, I haven't had heard TCOR in a while, but I like that. Right. The total cost of Risk. The natural flip side comes to mind here. Are there situations where a captive may not be the right solution? You know, even though your total cost of risk is a million, what are some of the most common misconceptions or scenarios where organizations might pursue a captive when it ultimately doesn't align with their needs? And you know, some of the things that I think about is, you know, a lot of people think, you know, I'm going to save so much money, but it isn't always a money savings venture. Right?
- [08:38]
B
Yeah, yeah. I mean there's a lot of clients and we'll touch on this throughout is sometimes we, we don't know what it's going to look like until you do the work. But trying to get some of those gating questions up front, you know, I mentioned, let's look. Where are you going to be in five years if you're a real estate company that all you're looking to do is buy, buy, buy with every dollar you have and you're highly leveraged, Even if your premium is exploding, it may not be the right time to deploy capital to form a captive because you're in that high growth mode. You're deploying, getting better returns, your ROI on your business than you are on the captive. So you can't put that growth potential at risk by retaining a potential loss even if there may or may not be some cost savings upfront. So we really want to look at what is the plan of the company, what is the capital position of the company and that could even be things that are, you know, can you afford that loss? But I mentioned growth. There's also the opposite is if you have a large premium in all things would lead to yes, a captive makes sense, but you're looking to sell your company in the next 12 to 24 months. It's probably not worth undertaking the captive initiative because your payback time may not be that quick and you've introduced something to launch while in the process of maybe trying to sell your company. So we do want to cover those items of business changes. Or maybe I'm not sure if you saw, I think it was allbirds that overnight decided to go from a shoe company to an AI company, probably not going to run into a lot of those. But if there's something that you're going to make a massive business switch that has changed your risk profile, we want to understand that up front. And maybe it's for the positive, but it could be for the negative as well.
- [10:31]
A
And I think that's a really good point. You Know, one of the reasons I think people might get into a captive is right, they've invested a lot in changing their risk profile, invested in safety, things like that. Then they want to reap that return themselves. When you completely switch your business model, there's a lot of unknowns there. So that'd be interesting for allbirds, I guess. Let's talk about the evaluation process itself. So when organizations or people, you know, are seriously considering a captive, what are the key factors they should be analyzing? Is it loss, history, risk, appetite, financial commitment, resources, internal or external?
- [11:17]
B
The short answer is yes. Yes to everything. So when we're looking at that feasibility, and some of that is unknown until you get a little further down the line of that evaluation and gathering all the data and really embarking on the process. But all of it comes into account in some aspect. And obviously for some companies, it's going to be more or less, as you kind of look at the pie chart, which one's more important. But this is a new business. A captive is a separate business entity. It may or may not be taxable as an insurance company. So there's those considerations when you're looking at those claims and those losses. The process is trying to become more transparent. So we want to get a central location for as many lines of coverage that makes sense in the captive transparently see what those losses are. So that's where you look at what is the risk appetite, who's involved in seeing that, and what's the mentality that that evaluation, the actuarial determination of what ultimate losses, both historically and then projected are. You know, this provides that sort of pivotal component of would a formation of a captive makes sense. You're down the road. So what's interesting when you look at the actual losses is we get a lot of calls and it's, well, I've had a bunch of bad losses, so a captive is bad for me. And you have somebody say, well, I've had no losses, so I'm a perfect candidate for a captive. And a lot of times it's the inverse. And we want to dig deeper. If you've had no losses and you're on a guaranteed cost program and you're paying a lot of money, okay, yeah, maybe you should be taking higher retention. If it's something like a cyber policy, a lot of clients have had zero claims, but that doesn't stop the ability for having a massive claim down the road. But you have really no evidence of how you would price that other than looking at the market. So when you look at the actual losses. Understanding if it's a frequency driven or severity driven loss over time can help you figure out, okay, here's what we want to retain. Here's the premiums credit we would get in the market. Now are we able to arbitrage some of that because we're implementing safety protocols? The market's not necessarily going to react in the same time you are and give credit just because you put in telematics. But if you know that that's leading towards a trend, you can arbitrage that and take that retention in house now and try and beat the market. So we're really trying to look at all these things and again, the losses, you have to share those with the carrier. So it's not like something that's, oh, I'm hiding these, or this is over here. Especially when you look at medical stop loss or some of these lines of coverage, the carriers get that submission. So they know as much as everybody what the losses are, but you know the story behind them and if it's something that is okay, we had this plant over here and it was aging and now it's shut down. So all of these should go away. And that was a major driver, or this division, or we've implemented this new thing that should cover all of those, you know, the stories better than the market. So it's really understanding and having the grasp of what things are as you're looking at forming the captive and then, you know, talking to those other internal resources and internal stakeholders that we'll get to. But ideally, it's not a massive undertaking for any company where you're not hiring new employees, you're not starting your own group to manage it, you're using the service providers in the industry to really help move this along and become just an added tool in the tool belt for everybody at the firm.
- [14:50]
A
Great. Now you guys aren't captive managers, so you're consultants. But I, you know, I'm not sure if you've had experience with this, but organizational alignment, I have seen so many times that as talking to risk managers who have captives, and then someone on their board will go, hey, hey, can we do this coverage? You know, at first they were fighting it and then it's some like crazy machine that should never be in a captive, like, don't take the risk, you don't know what it is or operation. And so in your experience, if you have experience with this, what role does the leadership play? The finance teams, the risk managers, the board members, in determining whether a captive is viable, sustainable and Alignment. Right. Where do you see that and what's your experience there?
- [15:41]
B
Yeah, Ultimately everybody needs to get aligned and, and it sort of depends on who's coming up with the idea, as you mentioned, or who really runs kind of the risk management program, if they have a risk manager, if it's chief legal, if it's CEO, if it's cfo, and then how it bleeds across from there. So it may not necessarily be a day one component of getting tax and legal and finance, treasury, everybody involved, as you're just trying to determine if you should even do a feasibility study, but definitely working up so that there's some knowledge of what's going on is very important so that everybody can feel a cohesiveness of what's going on. Then as things progress, then you're looping in more and more. Right. You're saying, hey, tax team, who do we need clears from for if we want this to be taxable as an insurance company, legal, we want to form in this state. Do you see any problems there? You know, CEO, here's how this will look CFO for our financials and how it changes. And if you're public, obviously a big determination. You're getting people looped in at various milestones so that they can also be one, stopping if they see any red flags. But two, feeling part of the process. So it isn't something that's, oh, now we have this captive. Everybody deal with this. Because I met a guy that said we should do it and we did it. So it's not a unilateral, just pick up and do this. You want to get others involved in their buy in so they know the process and they know what the purpose is, how it works to an extent and feel a part of it.
- [17:16]
A
Yeah, I mean, you know, captives are often discussed in terms of cost savings, but I think there's more to it than that. In fact, I don't think they're necessarily always cost savings, especially at first. Right. So I'm wondering how should organizations think about the financial commitment required? Right. Like group captive is very different than single parent. And so there's capitalization, long term funding, variability in results. And so how do people think about that when they're thinking, does that captive make sense for me talk about those challenges?
- [17:53]
B
Yeah, that's a great question. Especially a couple of years ago in the property market was really, really hard and clients were calling off saying all of a sudden my property premiums doubled, I need a captive. Well, at that point you're just still subject to the market and what they're going to give you. You haven't been ahead of the market. And we talked about market cycles. Sometimes forming a captive in a soft market makes the most sense because you've got more pliability as far as what you want to do. And then you're ready for being ahead of the market when it starts to try to tell you what you want to do or what it wants you to do. And you can have more decision making because you built up this war chest. So it's not a silver bullet. It's, as you mentioned, it's not saying, okay, today my premiums are a million, I want to cut those in half. What you're looking to do is cut the million dollars you're sending to the commercial market in half and for example, sending them $500,000 for a certain layer, and you're capped at $500,000. Now why does that still make sense? You're pushing that money to your new insurance company rather than delivering it to somebody else. You then would get nothing back if you gave it to them. However, for your budget in your C suite, you're really maintaining status quo. But at the end of the year, if things come back as expected within that captive premium, there's inherently a risk margin, a profit margin, things that are ready to absorb larger than expected claims. But so if they do happen, you're still budget neutral. If they don't happen, then you've recouped that savings within your captive. You've also then likely built investment income on it. So you're really looking at that long term, kind of end of the year solution rather than trying to cut things up front. Now, year two, year three, yes, you're going to want to start to take that million dollars down by either pushing less premium to the commercial market or funding your captive maybe a little bit less so that you can rely on some of that surplus. And as you get the experience, you talk about capitalization, and that's an important part of the program. And I think that's where it actually becomes somewhat counterintuitive of when a client or an insurer should look at a captive. You know, if you are paying that 1 to $3 million of premium right now, your capitalization in the captive, for example, could be $250,000. If you're a mature company that's spending a hundred million in premium, your capitalization may be 25 million, maybe 2.5 million. So when you look at the formation, sometimes it's counterintuitive. And this kind of Goes full circle to the AI of oh, I need to be this large before I start looking at a captive and setting kind of somewhat irrelevant milestones internally that may make it harder to form a captive because of the capital deployment, because of the retentions that are already in there and some of that volatility. So to me, you know, that sweet spot of starting the discussion is really that early on of, wow, insurance is becoming something. It may not be the right fit then, but it may be a better discussion point than again, the $100 million in premium or T core client that's really not buying a lot of commercial premium and you've got a heavier lift for that capital and cash deployment.
- [21:15]
A
Right. I think that was really well said, tj. I mean, I kind of like the way you broke that down. I think it's helpful. But beyond the financial side, right, that kind of recapping that over time, you are paying some of that premium to yourself and there's investment returns and if you have better than average loss experience,
- [21:34]
B
you keep some of it.
- [21:35]
A
Right. Beyond the financial, what are the strategic advantages that captive insurance companies can provide when it is the right fit?
- [21:45]
B
Yeah, and I really like this question and we always try and outline that when we start to keep going at the questions of again, the long term plan for the company and all these opportunities that opens. The unfortunate part is if you talk to sometimes the CEO or cfo, they just want to go back to that financial side, but really the financial side can build off of that strategic side. It's just not able to be proven out in day one. So when you look at that strategic side, you're saying, hey, I'm not just a buyer of insurance now. I've got this company, I've got this new tool that I can help choose what I want to sell to the market and what I want to sell to my captive for covering those risks. You've also got what we've talked about, a little bit of the central repository for claims. You're seeing now what claims are paid by year, by policy, those ratios that are very transparent within an entity and segregated off. So the financial packet that's given monthly, quarterly shows the results of your insurance program. And then you're buckling that up against what was spent commercially. So you're really starting to see where the percentage of risk is retained and where it's sent to the commercial market. You know, beyond that, then you say, okay, well strategically, can we get reinsurance from our captive? Now obviously that's a financial advantage, but what doors can we open over time? You know, should we be rated, you know, should we be taking more coverages in? You know, are there again, profitability or other things we can do with a captive? But I think most importantly, it's something that shouldn't be stagnant. You know, we run into larger, kind of more mature clients that have captives, and we ask what they're doing with it and they say, I don't know, I just send a check there every month, and then they send a check back for claims. And to me, that's just poor, poor utilization. So we do a lot of utilization and optimization reviews where we try to bring back in that strategic thought process that's happening once a year. You know, stewardship meetings, whenever the timing's right, just to not let the thing fizzle out, because they can be just such a massive tool, but they've got to be utilized, not just set aside.
- [24:04]
A
Great. Hey, once we figured out that, you know, captchas are a good fit. A gratuitous use of quotation marks there. What are some of the common starting points? Like, for example, how would someone choose between a group captive versus forming a single parent captive?
- [24:22]
B
Yeah, aside from as agree starting with captive.com and ermi and maybe supplementing a little with AI, but not an extent. You know, I think there's so many articles out there to get information, right? Everybody. Anytime you write an article or even this podcast, you're trying to give a certain viewpoint, understanding that the viewpoint is that of the author. And so you have to piece together certain aspects of everything that's out there to really help. Say, okay, here's where I'm leaning, but I'm not sold. I think that's the key, is not to be just sold because you read one article by one person that sounds really good, you know, sounds too good to be true. So it's having that vetting process and kind of talking to trusted advisors and others as you start to do a little bit of research. I keep bringing up that growth pattern because I just think it's so important of if you look at a group captive article today or a single parent card, whichever one, and you say, wow, this really fits me, but in five years it's not going to fit me. So do I want to go down this direction now and maybe move or grow out of a group captive or a cell captive and form my own, or do I just want to wait or do I want to do that where it's maybe a little too early, but I'm here for it? And maybe I can beat the expectations. So I think it's taking those different things into account. We've seen clients move from a single parent into a group and vice versa. So it's not uncommon, it's just not super common. And I think it's taking out. The previous question about some of the strategic things is what is a client's viewpoint? Right. You have some owners of an insured say, I want full control. I don't like the group because it puts me into these policies. I have more of an exposure at stop loss or property, and I want full control over everything. I want to pick the domicile even if it costs more. And then you've got the other side where it's, oh, wow, this kind of fits my model. I like to be a little involved. But if somebody else is telling me what the carrier and the retentions and the investment policy and all of these things that get some money back, that's wonderful as well. So I think you really want to identify the personalities behind the thought process so nobody is just pushed into something they either don't know about or are uncomfortable with.
- [26:44]
A
Awesome. I'm wanting to make this very practical for our listeners and I'm going to give some advice here that I think is really cool. And information first released on this podcast is that listeners not only can get all that information free@captive.com, but if they want to dig deeper.
- [27:02]
B
Right.
- [27:02]
A
And they want to use AI views. AI, hey, on the Internet, it's using stuff sourced from different opinions and different viewpoints. So as trying to be unbiased. At ermi and captive.com there's different viewpoints about captives. So when you use AI on the open Internet, I'm not sure what you're going to get, but we now have AI available. We're launching that@ermi.com so if you subscribe to captive insurance company reports and risk financing, you could have AI looking at research and produced by experts. So I'm always a little bit cautious of what you can get out there with AI. So if an organization is at the early stages, we suggest a little AI, maybe on the open Internet, then go deeper to expert sources that you can read that are unbiased and then go to somebody that knows what they're talking about and is an expert or recognized expert in the field. So in your opinion, though, T.J. that's my opinion. Right. In your opinion, what is the first actionable step they should take to evaluate whether it's worth pursuing further?
- [28:14]
B
To start a captive yeah. And I think you hit on good points. I think we talked about a little bit on the last question and sort of the action is, yeah, you look at those online resources and you talk to peer groups, you know, you're at the country club, you're at your networking, whatever it may be, and you ask somebody, have you heard about this? Right. Somebody may love it, somebody may hate it. And I think that's where you, again, have to draw your own conclusion. We also get a lot of calls where somebody or we have an outreach and somebody says, I'm a bad fit for a captive, and we know nothing about it. They've shared nothing. They're just a bad fit. And then we start to ask, well, what do you mean, why?
- [28:53]
A
Why?
- [28:53]
B
I'm an esop, so I don't get a tax advantage. It's like, well, we never said anything about tax advantage. You know, you, you just somewhere read or somebody online said, form a captive for a tax advantage. You know, or nonprofits for, you know, the, the industry. So there's a lot of things that just come to a conclusion before there's been exploratory or, you know, we talk group and single parent. Well, you know, this group captive I was in was bad. So I'm not going to ever join a captive. It's. Well, that. We're not talking about that. We're talking about this. And a lot of times you restart the conversation. So I think it is not necessarily letting somebody form the conclusion for you, but continuing to ask questions online through others, get a variety of opinions. You mentioned AI, right. I mean, captive.com is free, but it's written by people that know things that are vetted. If somebody is willing to do a feasibility study for free, you could probably draw the conclusion of how that's going to result or looking very good for you. Right. With very little data attained. So I think it's also even thinking of when that next steps. And we'll talk about that next on if you move forward, how you may approach even just moving forward.
- [30:05]
A
Yeah, yeah. We're talking about feasibility studies. Right. What does that typically look like and how long should it take? Right. Don't go for the free ones. I got that.
- [30:17]
B
Yeah. I mean, I'll start with the easy. The easy about how long does it take is about four to eight weeks. Yeah. I think the next logical question is, well, my renewal is in 10 weeks, so I'm not going to do this. Yes, it's probably impractical to think that a cap is going to be formed that quickly before formation. However, a lot of times the captives don't form at your renewal date. They're forming at some other date that either aligns with end of the year, beginning of the year, before or after the renewal date, depending on the program. And that kind of goes into what does the feasibility process and sort of output look like is you're really engaging somebody to take all of your losses, understand your company, look at your policies again across multiple lines of coverage. I like to say put everything on the table and then we'll start pushing stuff away because we don't always know what the primary goals are, what the retentions are, until we start looking at everything. And that also builds a growth plan for the captive, if you move forward is, hey, let's start with these three policies. In a couple years, let's move up to these two. Whether it's the excess or the property or maybe it's a management liability deductible. And then maybe way down the road we'll see and keep our eye on if something changes on this policy. So we're really trying to take into account the organizational uniqueness, what those lines of coverage, what the drivers are, what the results could be, and then looking at again, ownership of the company, taxation of the company, taxation of the captive and expectations there, what domicile would be a good fit, whether it should be fronted or not, the pros and cons, and then, you know, other considerations, expected expenses. Right. We always want to include what the expected results are, which is inclusive of expected losses and expected expenses. There shouldn't be any surprises of, hey, here's this. Oh, we forgot to tell you that there's also going to be, you know, this cost or this additional thing. So really trying to bake in the entire pro forma and captive into to kind of one distilled presentation and then really lining out next steps again, the recommendations, getting the feedback, if there's something missed, of what your policy requirements are as far as retentions, or if it needs to be fronted, if you can write it, direct those different things. And then, hey, if you want a form, here's that timeline for that and how you work through that process.
- [32:47]
A
I think for anyone who's still on the fence, they're thinking about this. What's one guiding principle you'd offer if they're deciding whether a captive insurance company is the right path forward?
- [32:58]
B
Yeah, I think starting the discussion with somebody that could do that work for the feasibility study at the onset, when you start gathering just basic information of what a company's risk profile is today as far as premiums and retentions and lines of coverage. Generally you can get in a red, yellow or green bucket, right? If somebody is all in spending $200,000 for every line of coverage, it's probably that red. If they're at 1 million and a half to 2 million, it may be yellow, depending on what those lines of coverage and retentions are. Then let's say it's 5 million of spend. It's probably towards that green from the premium viability, but it may not be from the loss viability. So we try and get those buckets. But the toughest spot is that yellow. Tom and you're really then trying to say, well, do we want to pay to find out if we fall towards the red or towards the green or if we're really in the yellow today? But in a couple years we'll be at that green. But looking at the importance of the risk management program and how it factors into the overall company should spotlight. Hey guys, we've been talking about this for years, so why don't we just go through the process? We'll get the information out of it. We'll get expected losses at various ranges. We'll get expected premium credits. We'll get what this would look like if we formed, and that's as powerful as anything. So we're getting a result. We're not just talking. We're getting a result. Keep in mind, the feasibility study doesn't commit to a next step. All it does is get you to the possibility of a next step and give you a lot more information. Option one is always do nothing. So at this stage, you can always do nothing or do a feasibility study. At the next stage, you can still do nothing. You could even take the recommendations of higher retentions that are outlined in the feasibility study, but not form a captive or form a captive and take the retentions. So we're trying to outline a decision tree that gets you further along the process into more cohesive risk management program as the company grows and as costs and like everything else in life just keep going up how to control those and how to finance them at a better mechanism.
- [35:12]
A
All right, well, that's great. I really appreciate that. And that's a wrap for today's episode. So I'd like to thank TJ Sheriff of Spring Consulting Group for sharing his insights and to Spring Consulting Group for its continued support and sponsorship of captive.com which allows us and you to explore more free educational content, articles and expert perspectives by visiting captive.com thanks for listening.