Archive for June, 2008

Cedar Consulting LLC to offer Virtual University of Online CE Courses

June 23, 2008


This is great news for those who are interested in earning their required Continuing Education requirements for their Property and Casualty and Life and Health Insurance licenses as well as CPE for Certified Public Accountants.  In conjunction with, a recognized leader in professional education delivered in an online environment, we are now able to deliver a large catalog of insurance and accountancy courses. 

Not only is the coursework approved to meet the annual and bi-annual continuing education requirements in every state, it does so in a cost effective and convenient way.  Online education saves you time and money.  You can take classes whenever and wherever you want and with a large library of available course titles you are investing your time in something constructive; learning and not just doing time to finish your requirements.

Cedar is currently developing coursework for Captive Insurance, Risk Purchasing and Risk Retention Groups topics.  In the very near future we will have these courses available through its Virtual University, fully approved for CE credit in all the states.

Cedar Consulting’s Virtual University can be found online at 


Bermuda Captive Conference- Cedar/USA Risk Group Announcment

June 17, 2008

All this week the captive community has descended on the Southampton Princess for the Bermuda Captive Conference.  In its fourth year now the conference is well attended with about 500 captive professionals.   The conference includes a specific track for Healthcare captive issues which is curious since for many years Bermuda neglected this market segment, essentially putting Cayman into the healthcare captive business.  Perhaps this is an indication that Bermuda is now welcoming this segment into the ranks of the largest global captive domicile with nearly $30B in captive insurance and reinsurance premium during 2007.

My own company, Cedar Management Limited and Cedar Consulting LLC had a big announcement just before the beginning of the conference.  We have reached agreement with USA Risk Group, Burlington, VT for them to purchase a controlling interest in our companies.  The original partners of Cedar will retain a significant ownership percentage and the companies will continue to trade in the US and Bermuda under the Cedar name.  We are very excited about the opportunities that this presents for our company and our clients.

More news from Bermuda to come over the next few days. 


Timing is Everything

June 13, 2008

Go West Young Man

Rocky Mountains, 1957

When the topic of alternative risk transfer programs comes up in conversation I am politely reminded by the other party that we are in the midst of a soft market and now is not the time to be dragging all that captive stuff out for clients who aren’t feeling any insurance pain.  After all, captives are the stuff of hard markets. 

The Story

Let me beg to differ by telling a little story from my past.  Let me say that this story is the substance of serious family lore.   Outside of weddings and reunions the whole story has never been told, up until today.  While I was a participant in the events I have had to rely on my father for the details.  He was quite a story teller so the exact facts may have been stretched a bit, although my mother, who often corrected the exaggerated details of my father’s tall tales, had little to say about this story in particular.   They have both passed on so the details are now etched in stone.

I grew up an Air Force brat and for those of you that have never been in a military family what that means is that your life is turned upside down every couple of years as you move from one base to another.  I learned this lesson at a very young age when we were transferred from my birthplace of Loring AFB in Limestone Maine to Clark Field in the Philippine Islands.  My father was to fly from Sacramento to Manila to report for duty while my mother and I were to follow by Navy ship from San Francisco (that’s another story!).   It was the spring of 1957 and we packed up the 1952 Mercury Monterrey and started the Maine to California trek.  Remember, this was long before most of the Interstate Highway system as we know it was completed.  This was the Ultimate Road Trip.

The weather during our cross country trip was unseasonable warm and while the Monterrey was a comfortable ride with a powerful 8 cylinder engine it did not have air conditioning.  After several days on the road I wasn’t feeling too well and the hot car ride just wasn’t helping.  Remember, this is 1957 and that means cloth diapers.  You know, the kind you save in a bag and then wash and reuse.  Let your imagination wander a bit here.  Hot car, sick baby, soiled cloth diapers piling up in a bag.

My father was not a patient man, and even less so as the day went on.  Somewhere in the mountains of Colorado on a twisting and turning section of road he reached his limit.  “Get rid of those dirty diapers”, he boomed.  “What do you want me to do with them?”, asked my mother.  “I don’t care, throw them out the window, just get rid of them!”  My mother reached into the bag and grabbed the worst offenders and rolled down the window.  My father, looking in the rear-view mirror said, “OK, toss them.” and just as my mother’s fingers lost their grip on the rolled up cloth he yelled, “STOP!”.  A car had come round the bend right behind us and my father watched in horror as the dirty diapers hit the windshield of the car and stuck there.  The shocked driver turned on his wipers, making matters worse as the diaper, apparently hung up on the wiper, smeared its contents across the windshield.  Timing is everything!

My father pulled the overdrive lever on the Mercury and we sped away as quickly as he could negotiate the curves and didn’t stop until we reached that night’s motel.  I am convinced that somewhere in the world there is a reciprocal story being told around the tables of family gatherings about the day some lunatic with Maine plates nearly caused grandpa to drive off the road when a dirty diaper hit his car!  What a day it would be to meet that person!

Timing is everything!

So the point of this story, other than perhaps to make you smile, is that timing is everything.  If we wait until a hard market to pull out the hard market solutions, then its really too late.  If hard markets were like hurricanes, tornadoes or dirty diapers (we know they happen but not when and where) then we could be satisfied with a reactionary solution, but history tells us that insurance pricing moves in a cycle, its predictable, and we know that while in the depths of a soft market is exactly when we need to be making plans for the next hard market. 

If you are a risk manager or an agent/broker, don’t get enamored with the insurance market pricing and conditions you have today.  Take advantage of them, but at least look to the future and decide how you will handle the changes that we know are sure to come and then put into action a plan to start to develop those solutions today.   A captive insurance initiative may be the solution you need.

Captives and Flight School

June 6, 2008



Cedar Air



This is your intrepid blogger preparing for yet another death defying trip into the ether in pursuit of his private pilot’s certificate.  I’m really close to finishing my studies and hopefully will be taking my “checkride” in the next few weeks.  Flying has some curious similarities to putting together a captive insurance initiative. (I know, everything has to relate to captives!)

Preflight  Advanced planning of the route of travel, the landmarks along the way, the physical conditions at the destination airport typically occur hours, even days, in advance of even showing up at the airport.  During the preflight preparation a pilot has to secure information relative to the environment that the flight will be conducted in.  Weather is an obvious factor, but that considers much more than just rain, clouds and storms.  Barometric pressure, wind speed and direction and temperatures all play a major role in flight planning.  Next comes a systems check of the aircraft.  Everything is inspected in detail to try and mitigate any in-flight conditions that would be dangerous because of a systems failure.  In order to successfully plan a captive insurance initiative we have to understand where we are trying to go and the environment in which we will be operating in so that contingencies can be planned and a go/no go decision can be made with confidence.  Planning is paramount to a successful flight as well as a successful captive launch.

Engine Start and Final Checklist  Once the engine in a small aircraft is started all the flight systems are checked again to make sure that they operate correctly from within the cockpit.  The engine function is checked at various power settings and configurations to make sure it will operate as expected during all the phases of flight.  Finally, you sit at the end of the runway, apply power and then utilize all the “stick and rudder” skills you have acquired to make the plane fly.  Once the design work of a captive is completed it is time to launch it and to start to conduct business with it.  This doesn’t happen on “auto-pilot”, it has to be watched and skillfully monitored as it takes flight.

Check points and Map References   As we turn to the compass heading we planned for to reach our destination we have laid out our course on a map that shows ground features that we can spot from the air to verify we are on course.  Planned in advance of flying we know how long it will take us to reach each of these checkpoints based on wind speed and direction.  Often things don’t turn out exactly as planned and it is necessary to adjust heading directions and power settings in order to stay on track to the destination.  In a captive initiative it is important to have the plan laid out carefully, but it is just as important to monitor progress and make adjustments as the program matures.  This is a step that so many captives fail to take.  A captive insurance program operates in a dynamic environment and that environment must always be compensated for.  Think about driving a car on a well marked highway versus flying a plane in three dimensional space with no “rumble strip” when you get off course!

Arrival at Destination  Assuming that you have been paying attention to all the details up until this point you should arrive at your destination on time, with plenty of fuel to spare and with confidence in your knowledge of the conditions you will  encounter when you get.  Its only because of careful planning, attention to detail and the adjustments made en route that you reached the destination in the first place.  A successful captive insurance initiate reaches its planned destination in the same way.  Monitoring the progress in relationship to the plan helps the captive manager and owner make tweaks to the program that will help the captive arrive at its planned goal.

So often I come across captive insurance programs that that are “off the shelf” cookie cutter solutions to general insurance problems.  In a static world they are sufficient solutions to single issue insurance buyers.  They work a lot like a AAA road trip map.  As long as you don’t encounter any difficulties or detours along the way you should be able to reach your destination.  That’s not the current business or insurance environment however.  Change is measured by the hour in some segments and it is critically important that a captive be designed to be able to change along with the environment.

Good planning, execution and monitoring and feedback will lead to a successful flight as well as a successful captive insurance program.