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.