The Captive Industry that has recorded exponential growth over the next five decades, distinguishing Bermuda and fueling the foundation of the island’s entire insurance industry. Do you know any of the trailblazers, way-showers, vivid visionaries?
As I say captive are you thinking prisoner or an alternative risk transfer option?
The Captive Industry that has recorded exponential growth over the next five decades, distinguishing Bermuda and fueling the foundation of the island’s entire insurance industry. Join me in conversation with Jonathan Reiss, the managing director of Strategic Risk Solutions, Cathy Duffy author of “Held Captive” and the first inaugural recipient of the Fred Reiss Lifetime Achievement Award Jill Husbands.
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Podcast Host: Life & Leadership: A Conscious Journey with Michelle St Jane
A podcast for Global and Re-Emerging Leadership creating community/tribe, a circle of influence, transcendency of compassionate leadership in the world and wider universe. A unique destination for learning about Leadership + Conscious Stewardship + Legacy.
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Dr. Michelle St Jane: [00:00:39]
Remembering Fred Reiss the grandfather of the captive industry founded in Bermuda in the 1960s. Why Fred Reiss?
As I said, was the grandfather of the captive industry and it recorded the exponential growth over the five decades, distinguishing Remuda as the world captive leader and fueling the foundation of the islands entire insurance and reinsurance industry.
[00:01:03] Jonathan Reiss is the managing director of strategic risk solutions and he shares some of his family's history and legacy. I'm going to be joined by Kathy Duffy author of held captive. And the first inaugural recipient of the Fred Reiss Lifetime Achievement Award, Jill Husbands join me in the conversation first to introduce the topic.
[00:01:24] I'm wondering, as I say captive, are you thinking prisoner. Whereas, captives can offer freedom, their vehicles to take the liability. You would have transferred to an insurer if you can. And it turns it into an alternative risk transfer option. Captives have one of those options. They offer broader selections as well.
[00:01:47] Sometimes markets struggle to take the risks that need to be placed with traditional insurance and reinsures then walk under the right conditions. A captive may provide a solution. Think of it this way [00:02:00] and your personal life. You have life insurance to cover the risk of pets earlier, unexpected death.
[00:02:05] You have property insurance to cover any catastrophic situations that may arise. Say fire, earthquake travel insurance, and basically in your personal life, you try to manage the uncertainties. And also this is the same for organizations, safety coverage for the liabilities and risks of doing business.
[00:02:24] Moral has organizations have obligations, regulations, and legal requirements. We need to secure insurance to be in good standing with the law makers and the regulators I captive becomes that insurer. Basically self-insuring those liabilities that are uninsurable or those that are high-frequency risks.
[00:02:45] And also you can obtain direct access to reinsurers. That's a strategic risk management tool. A captive can be formed for an organization and industry. It gives greater control of your insurance program and the choices around whether to [00:03:00] take on. Some or all of the risks that you have going into that business, and it offers you the opportunity to transfer some, all of those risks to an insurer or reinsurer.
[00:03:12] I'll explain further. So let me tell you a story. Oh, is it the decades? My career has evolved around captors. First. I started off as a young professional managing the database. Well, the administrator for the database, for the American bankers, they had the largest captive in the world and the eighties when I was doing this, and I had an opportunity to do broking for the fortune 500, there were some ginormous risks that needed to be placed.
[00:03:39] And some of those risks were not always insurable or even affordably. Insurable. So the group that I worked with also had an arm that provided captives. After that I went off to law school and while I was at law school, I had the opportunity to, again, to circle back on why I kept us so important from UDA has been [00:04:00] deeply involved in astronomy and brokering stochastic time.
[00:04:04] The Island was not only tracking aerospace launches, but reinsuring them as well. Fed rise formed the first modern captive in 1962 in Bermuda. Keep in mind from the beginning of the 1960s, Bermuda was half of the national aeronautics and space administration, better known as NASA and their worldwide support network.
[00:04:25] It was one of the tracking stations for the U S space projects, and it was housed in Bermuda on Pippa's Island, between 1961 in 1997. And came back again in 2012. The primary task was for the Island station to provide Goddard space flight center with trajectory, data for flight missions and making the decision with it.
[00:04:46] There was a need to use the Atlantic ocean as an aborted landing area. Thus, I hit the chance to watch the aerospace industry in motion. And in the late 1980s, I saw the development of communications technology and the demand for [00:05:00] utilizing commercial operations and orbit. By the 1990s, captive insurance had become a global industry and Bermuda a major player in the early 1990s.
[00:05:11] I also followed industry initiatives, brokerage, satellite dealings, and I read very widely as well around launch activity. One of my favorite books was the use of aerospace and outer space for all main kind of the 21st century. And this was part of an international conference that was held in Tokyo in 1993.
[00:05:33] So the 1990s was the times of fast development. If there is space. And I still have opportunities opening up the commercialization of spacecraft and satellite, given the critical and essential nature of the aerospace industry for both commercial and military sectors, there was a need to place these volatile risks in the market.
[00:05:53] So I got an up close look at the properties of kismet time. This. Time involved in calamities, [00:06:00] catastrophe, disaster and misfortune. After law school, I came back and I was working as an in-house counsel for multinational, and I was teaching at a local educator provider and I was teaching risk management and American goal for insurance.
[00:06:15] I was asked to chair a committee, which came up with the lifetime achievement award and the market leader award Fred Reiss. The grandfather of the captive industry was the first recipient post humorously cause he had died in 1993 by the turn of last century. My engagement with captives had come around in a variety of ways.
[00:06:36] So why captives, they provide a strategic risk toll. They can bring the captive owners or users cutting-edge solutions for those things that are too difficult for risk financing. It's also key aspect as a solution because it gives greater control of the insurance program. There are innumerable service providers who gets involved attorneys.
[00:07:00] [00:07:00] Third party, administrators, brokers, captive managers accountants just to name a few, but they all come together to work on the goals that the program has designed to achieve. Why is this important? Well, I think there's this triangle of stress that leads to why captives are considered. This includes increased pricing of insurance and re-insurance.
[00:07:21] The capacity of the market to accept the risk of risks and the breadth of coverage, which can be further compromised by constructive use of severe terms and conditions being applied to the risk, captives, the forum for creating capacity and opportunity and changing markets. They're also a valuable tool for the placement of unique risks.
[00:07:42] So who utilizes the captive? You may be involved without even knowing it. It crosses organizations and industries take, for example, there are cactus for the construction industry, transportation, healthcare manufacturing, real estate, retail restaurants, hospitality, Marine. I could go [00:08:00] on the risk profile.
[00:08:01] We're an industry and an organization may need help. They may use a captive for employee benefits. Who may not know that this is holding your benefits as well. They might use it for professional management of people. Risk options for decline risks for resolving traditional barriers to entry, punitive pricing markets are cyclical managing a hard market or a hardening market means you may be faced with higher pReisss or pReiss.
[00:08:28] The volatility. A captive can take out the troughs and the hikes of pricing and capacity. You may need the flexibility of a captive. One of the benefits is they excess reinsurance in a host of markets that may not be available to you through traditional re-insurance. Consider the global risk landscape they call for multinational.
[00:08:51] Pooling of risk is changing of risk management needs and planning. Long-term risk financing, managing risk appetite, [00:09:00] complementing traditional insurance placements, filling coverage gaps. There are micro captives insurance programs, alternative risk solutions. I will have an excellent glossary link. In the show notes, if you are even curious to know more about what those terms meaning.
[00:09:16] So why is this important? Well, we are in a post pandemic world. We need new resiliency. We need to manage new and emerging risks. Do you know the impact on society and industry? What is the risk landscape look like? It's an unknown for the short term longterm impacts and uncertainty take for example. We do not know how COVID-19 will impact the insureability of this.
[00:09:44] Take the senior care market who doesn't know, or have a relative who was in need of assisted living or care as a senior. Well, this is a hard market for the senior care industry, and there is a role for [00:10:00] captives. Add to that. The Corona virus, it bought the longest UAS economic expansion to a full stop.
[00:10:07] Adam physical distancing measures, lockdowns the resulting historic collapse and economic activity close down. Cities, States, countries, business insurance reported recently are two interesting outcomes. So do you know directors and officers insurance? Are you a director? Are you in office? Well, business insurance reported that management liability risks are increasing due to this global pandemic and other plane trends.
[00:10:36] Some insurers are struggling to address rising frequency and severity. So there are needs for new solutions to be delivered. On the other hand, Qatar ensures that their profits Rose by 19 the seat, despite the pandemic, according to the data that Qatar stock exchange listed, insurers increased it and posted a [00:11:00] 19% year on year growth.
[00:11:02] An aggregate profit to 500 million, or I think that will be like about 137 million us in 2020, even though there was a pandemic. So if that hasn't got your eyebrows raising, consider this, the post COVID landscape is still evolving. We don't know what the new and novel risks will be. Can you place these risks in the traditional marketplace?
[00:11:28] If not, where. Are you considering the global risk landscape? Do you need the option of a multi-national pooling of risk? Are you up to date with the changing risk management needs planning long-term risk financing, managing your risk appetite, needing to compliment your traditional insurance placements.
[00:11:48] Might you discover that you have coverage gaps to fill? So you may actually be exploring a captive or after this, considering it, you might have these questions. Why should [00:12:00] you consider a captive. Is it right for your business? Are there advantages? What are the types of captors to consider how to set up a captive?
[00:12:08] Well, going back to business insurance, again, they have a captive directory and they have a list of 2021 captive managers in Derma salts, and they have them ranked for you. There will be a link in the show notes. The captive industry is papered with way showers and trailblazers. It has to be frayed Reiss lead the way.
[00:12:29] What does it mean to be a leader in the context of exponential technologies and disruptive, repetitive change? I would humbly suggest first be more intentional and intelligent about the future. We're creating second being adaptive and willing to thrive in a future. That looks nothing like the past third.
[00:12:49] Be able to bring your best global thinking with the best and local and cite. The face of familiarity and safety keeps us locked in the past. They may not be [00:13:00] fireball. It's a new century, a post pandemic world and a new decade. Let me introduce my guests, Jonathan Reiss, son of afraid as a corporate leader who courageously speaks out with regards to diversity and inclusion.
[00:13:14] He's also the managing director of strategic risk solutions. I invite Jonathan because he cares very deeply about DNI and the culture of business. So this episode, he shares the history behind his father's lead up to initiating the captive industry. Kathy Duffy is the author of held captive, a book that captures even institutional history and development of the sector.
[00:13:37] Following her, the Fred Reiss lifetime achievement award, we launched in 2016 in the name of Fred Reiss. He evolved this idea of self-insurance and strategic management over sort of dedicated subsidiary and the first recipient. Is Jill husband's former chairman and managing director of Marsh Bermuda. The second was the PM was Michael J.
[00:13:59] Burns. He is a [00:14:00] Bermuda lawyer who is part of the Bermuda regulator and heads up legal and enforcement. The third recipient was Brian Hall and industry icon and former director. And president of Johnson and Higgins and the most recent awardee as the executive chair of the BMA, Jeremy Cox, he was recognized for his contributions to the Bermuda insurance industry and financial services sectors.
[00:14:23] And that was 2019. There hasn't been another one since. So today we have Jonathan, Kathy and Jill and I hope in the future to have Mr. Burns and Mr. Cox from the regulator, come on and share their thoughts around the sector. Thank you for joining me. Today I have with me, Jonathan Reiss, and Jonathan's Reiss has a wonderful story, a heritage and lanes into a legacy that was started the generation before Jonathan.
[00:14:51] Welcome to the episode. Thank you for being here.
[00:14:55] Jonathan Reiss: [00:14:55] Thank you for having me.
[00:14:56] I'm honored to have the opportunity to remember your father [00:15:00] food Reiss. The grandfather of the captive industry has he's called out there. Could you just kind of tell us how you came to be? Uh,
[00:15:08] sure. I mean, it it's all credit to my father, Fred Reiss.
[00:15:11] He grew up in Cleveland, Ohio. And he came from a modest family and was fortunate enough to get a scholarship to Harvard. And then he returned to the Cleveland area, uh, with an engineering philosophy degrees from Harvard. And he started out in the safety inspector, working for. You know, risk managers in the insurance industry, he went down and like the coal mines and did safety inspections for insurance companies.
[00:15:34] But yet he ultimately became a, an insurance agent and his clients were the large deal companies in the Ohio Pittsburgh region. And they couldn't always buy the, uh, insurance coverages. They needed, you know, insurance companies often have prescribed policies and they didn't always match up with his client's needs.
[00:15:51] And my father loved to travel. He, he, he made his way over to London and he met some very innovative people at Lloyd's of London. And he discovered that really [00:16:00] most of the risk ended up there anyway, and they were much more flexible in terms of the types of coverage they'd offer. And so this, this is how the idea of a captive, uh, was spawned.
[00:16:09] He realized that. If he could actually design the structures he wanted to for his clients, but the risks with ending up at Lloyd's. Anyway, it's just that the insurance companies and us weren't flexible. So he discovered the concept of feel company in this case, forming its own insurance company to provide its own customized insurance solution.
[00:16:25] And then the risk has passed straight to Lloyd's market, where they were quite happy to be flexible. The only problem was you needed a jurisdiction with which to give birth to these insurance companies. And it wasn't easy because insurance regulation is why insurance is very heavily regulated in most large countries.
[00:16:40] So where could you find a jurisdiction that would be willing to be innovative, but still have things like for me to have so much advantages to the British system of law, but he didn't actually start out in Bermuda. He actually. First went down to The Bahamas and the Bermuda reinsurance industry could well have been in The Bahamas, but they weren't quite as intuitive as Bermuda.
[00:17:00] [00:16:59] And in the end for Mudo ended up being choice, location, and death. How Bermuda became the center of gravity for the captive insurance industry, which is still is.
[00:17:09] Dr. Michelle St Jane: [00:17:09] Absolutely. I used to love to tell my students the story about your father. I taught American law for insurance, and I also taught risk management the ARM
[00:17:18] and, you know, they didn't know the history. Exactly what you said. You know, it was just, it nearly, this industry did not nearly did not land here, but it could have very easily gone somewhere else. And boy, what a difference it makes, because when you look at companies like ACE going into underwriting, satellites and rockets, which is amazing, we wouldn't have this like technology and the internet of the stars coming up without that kind of underwriting as well.
[00:17:46] Jonathan Reiss: [00:17:46] Yeah, that's absolutely right. I think you got a lot of credit needs to go to, there was very innovative people at Lloyd's of London who, without them, Fred probably wouldn't have been successful. And, and there were people in Bermuda who helped him in a way that wasn't available [00:18:00] elsewhere. I do want to make one other little historical point.
[00:18:02] Cause I think people always enjoy this, but the turning up my father was credited with coining the term captive a lot of people in the industry. People who've worked in the captive industry, all their lives don't know where that term came from. And it came from actually the steel industry, steel big us steel companies.
[00:18:18] Their factories would shut down if they didn't, they didn't have enough coal. They relied on the delivery of coal. And then sometimes there was blockages in the delivery of coal and these, these big. Companies would get frustrated that it would cost a lot of money if their factories had to shut down. So they ended up doing, you know, I think it's called vertical integration.
[00:18:34] They ended up buying their own coal mines, so they didn't have to rely on other people to deliver their coal and the mines that each steel company owns were called captains. So that's where the term captive comes from in the insurance industry. So I was basically from coal mines owned by steel companies.
[00:18:47] First, I should thank you for being one of the committee or the chair that made it nominated my father for that award. That was, I think the Bermuda insurance towards first. So here's a funny, interesting [00:19:00] tidbit so that my father was given that award and it was back then. The awards for quite a number of years were big gala dinner events.
[00:19:06] And my father had the great honor, thanks to you and others on the committee being the first ever recipient of the lifetime achievement award. And so I was there with my sister too. My step mother that'd be to posthumously accept the award. And Brian Neupro was the first recipient of the insurance person of the year.
[00:19:25] Market leader. Yes. Okay. So he was there and so I really met him for the first time there. And I ended up working for Brian at Hamilton insurance group many years later. So that was a wonderful connection, but even better after I received the award that night and I gave a little, very short speech. I met my wife that night.
[00:19:43] Catherine Duffy: [00:19:43] What specifically did you want to know about the book, Michelle,
[00:19:46] Dr. Michelle St Jane: [00:19:46] Fred Reiss he's the grandfather of captives. How do you see his place in terms of contribution to the Island and how captives contribute
[00:19:55] to the Island? You know, the interesting thing is the concept of captive was [00:20:00] around before Fred Reiss actually took it to the next level.
[00:20:03] Catherine Duffy: [00:20:03] It was the oil companies who needed a solution for them to carry their products around during war time. And they actually came up with the concept of captives, but it was actually Fred Reiss who took that concept because he recognized in about the fifties and sixties that some companies were having difficulty placing coverages and recognize that these companies could actually start.
[00:20:28] Taking those risks on themselves into their balance sheets. So he was the one who took that concept from the energy industry to a much broader range of clients. When he first was trying to find a jurisdiction for it. He couldn't. He was traveling near and far trying to find jurisdiction that could actually allow the captive industry to take off.
[00:20:53] And he just happened to be in London and have dinner with someone who ran Lloyd's [00:21:00] or had a Lloyd syndicate as well as bill camp. And while I can only think of his name right now, um, he was very instrumental in the law. World as well. I can't think of his name. Hopefully it'll come to me later, but they were all at this lunch.
[00:21:16] I said dinner. They rolled out a lunch on a Sunday afternoon. And Bill Kemp is very keen on putting Bermuda on the map for getting international business here. After AIG set up ALCO here. For their international operations in 1947. So as a result of that, the industry here started to think we could make put Bermuda on the map for international business.
[00:21:40] So Bill Kemp was out marketing and he told Fred Reiss. About Bermuda, Fred Reiss didn't even wait for bill Kemp to come back to Bermuda. He just flew to Bermuda and ended up meeting with the Henry Taka, who also was out there marketing the benefits of Bermuda. And at that time was [00:22:00] running the bank of Bermuda, spoke to him, and that is how the whole captive industry took off.
[00:22:06] A chance meeting. And at a time Bermuda was trying to put itself on the map, but it didn't happen right away either because the captives didn't come until the market started shifting in the sixties. After a few hurricanes happen, there were a few, a large oil losses, and the real surge in captives started to happen after the 1970s, but he had persistence.
[00:22:32] Dr. Michelle St Jane: [00:22:32] absolutely. And affects such persistence that, um, in 2020, there was a large number of new captives registered here and the gross premium written as approximately 40 billion. According to the Bermuda Monetary Authority, I'll put statistics in the show notes for people to see. Cause it's. That's like huge money, but it also created a solution.
[00:22:53] Didn't it? It created a solution for business being able to retain and manage their own risks as well. [00:23:00] Yeah. So how did you come to write the book? How captive, what was the driver behind that?
[00:23:05] Catherine Duffy: [00:23:05] Well, I had taken a sabbatical from the industry, had my son and decided that I wanted to stay at home. Never thinking that I would do that because I was at the height of my career as well.
[00:23:18] Right. So it really surprised me, my husband and everybody else around me that I decided to step away from a high profile career to be a full-time mom. But my mother died suddenly when I was 13. And you don't realize the impact that those. Those tragedies have on you until much later. So becoming a mother myself and I evolved, actually, when I was young, that I was never going to be my mother, that I was going to be this career woman that was independent and had her own source of income and all sorts of things.
[00:23:51] So it really shocked me that. I realized just how critical the role of a mother is. And that's not to disparage any [00:24:00] woman who decides to continue to work. Each woman has the right to do and should do what feels right to her and to her family. There's no right or wrong way to do things is just where we are in our lives.
[00:24:10] And I always caveat that because, you know, some people try to pit one side against the other and there is no right or wrong. It's just what feels right to you and your family. But for me, that felt right for me to stay home with my son. And during that time, you know, I was trying to figure out ways that I could stay home for as long as possible.
[00:24:29] And I started to write columns for the Bermuda Sun. That was a spiritual column, actually about how I journied from being a career woman to a full-time mom. And the feedback was so great that it expanded into justice, spiritual column. And then it got so big that people were like living off of my, every word that it scared me.
[00:24:48] So I stopped writing the column and decided to do something more technical. And although the world is that had asked me to write something about the insurance industry and then it [00:25:00] got so much feedback that they asked me to write a Monday column for them on insurance, which I started to do. And what was interesting about that is I started having all sorts of analysts from around the world called into ask
[00:25:12] my, my opinion on things, which is kind of laughable. But anyway, it just shows that, you know, none of us have the answers. We all just need to help each other to collaborate. And from me doing that column Brian hole, then ox me if I would write the book about the history of international insurance in Bermuda.
[00:25:32] And I naively thought that there was already something like it, but he just wanted me to expand on it. And once I started doing the research and trying to figure out what the intention of the book was, I realized that I was completely in uncharted territory. There was nothing that had set out any basis for the international insurance industry.
[00:25:56] So I had to set up an Excel spreadsheet just to [00:26:00] try to find trends or what. How the book was going to be best laid out. I interviewed over a hundred people because I had to figure out where this all started from. And thankfully, I got to several of these people before they passed away. And once I started to get the information and put it in years, I realized that there was a trend that was occurring.
[00:26:26] And that trend was that every 10 years. After the sixties, the world changed and Bermuda responded by doing captives in the seventies and the eighties XL and ACE reform because of pharmaceutical problems, medical malpractice, tort liability, going through the window, the roof, I should say windows not high enough.
[00:26:49] And then we had finite risk with a century in the nineties. We had some of the hurricanes that happened. 2000 again, hurricane. So we've [00:27:00] responded every 10 years. This keeps occurring every 10 years and Bermuda has responded to the world in providing solutions for global stability. And that's something that a lot of people do recognize, you know, they think of Bermuda in isolation.
[00:27:13] A lot of people think of us as a tax haven. A lot of people think that we're a fly by night type jurisdiction without Bermuda a lot of the world would have been destabilized. We have provided solutions or companies, communities, countries and people globally thanks to people like Fred Reiss who had foresight, as did the people that came in the eighties and the nineties. So without them, we just wouldn't be where we are.
Dr. Michelle St Jane: [00:27:46] Absolutely. In fact, I remember when I was working at ACE at the time, I did not realize that financing for rockets and satellites depended on re-insurance because of this we have this God-like technology today.
Catherine Duffy: [00:28:04] We have this part to pay. That's incredibly important. When looked at more deeply sensationalizing, it messes the total point of the mess and contribution. Now as the host of not only. Global organizations, but global payers have a heart for, for the world and the articles. Most powerful. We're not called
[00:28:26] the incubator for the world for no reason at all is because we allow companies to form ideas here.
[00:28:33] And then they branch out globally after that.
Dr. Michelle St Jane: [00:28:40] How did that come about?
Jill Husbands: [00:28:42] Okay. Well, I guess that was another funny story. Really? I took a year off from work in London and traveled. So I backpacked around the world and, uh, that was a wonderful experience. On that trip. I met an Australian girl [00:29:00] who had actually come to Bermuda. She was a nurse. So she had come to Bermuda to work.
[00:29:05] You know, she said we were really good friends who still wanted to come for holiday. So I said, Oh yes, that will be fantastic. I'll come for holiday. So I came to Bermuda on vacation, had two, one, four weeks here, went back to London. That was the end of that. And then by this stage, I'd actually moved from underwriting to broking.
[00:29:25] I was a reinsurance broker by then. So I was sitting at my desk in 10 Trinity square, which is an iconic building in London. And that's where, what his paperwork again, in those days, And the phone rang. And I guess one of the things is being a female in the market, especially in the aviation market. Back in those days, there were so few of us that, you know, none of the guys teased us and I mean, you know, it was all sort of good fun, really.
[00:29:52] So this gentleman was at the other end of the telephone and said, Oh, hello, Jill. And I'm thinking, gosh, I don't recognize this voice, but I [00:30:00] didn't really want to say anything. I want you to try and see if I could figure out who it was. And he said, would you be interested in a job in Bermuda? And I thought, okay, this is just a big joke.
[00:30:10] They know I've just come back from two weeks vacation. So I played along and I said, Oh yes, yes, I'm interested. That will be fun. And they said, Oh, well, can you come to an interview at blah, blah, blah. So I said, absolutely sure, because I thought, okay, I'm going to get my own back on you because I know you're just, this is just a joke.
[00:30:30] Right. But of course, when I got there, it wasn't a joke. It was a real interview. So I started off by explaining. But I thought it was a joke, which I'm sure it's the person doing the interview must must've thought was a bit odd. But anyway, at the end of the day, they offered me the job and I decided to take it for two years.
[00:30:49] And partly because I was fairly ambitious and I'm more than that, I really want you to be taken seriously. And this was a [00:31:00] promotion for me coming to Bermuda. And so I thought it would be good experience. So that was how I came to Bermuda. Wow.
Dr. Michelle St Jane: [00:31:08] I actually, after I mentioned to you earlier, that I had had a chance to be an administrator of one of the largest cactus in the world, the American bankers association databases, every key I pressed on the computer, I sat there with my hands in a prayer position saying don't delete the whole bloody database.
[00:31:29] You know, those programs were so fortunate and happen, but one day Bob came out of his office. And they'd lost another broker. And he said, Oh, he says, you'll friendly, you're articulate. And I think you can be charming. Do you want to be a broker? I don't think of lots of brokers like yourself. I want it to be taken seriously.
[00:31:51] So I'm like, Oh, sure. And this was in the, in the eighties anyway, late eighties. So next thing I know I'm broken to the fortune five [00:32:00] hundreds sitting in boardrooms of many black suits, the men, and fortunately being the mother of two sons, I could give them the mother look constructive control and beat it.
[00:32:11] And a little respect, right? Like two or three of us, possibly four women doing this. And we were quite isolated and there was one other woman and I, we were quite collaborative, but the other two weren't, they were very competitive. So there was these mixed messages and lack of trust as well. And, and within the women's groups, I think, which was a little bit challenging.
[00:32:37] Yeah. Think you were at Marsh in the eighties, went you, did you come up to it?
Jill Husbands: [00:32:43] came over to Bermuda as still as an aviation underwriter in the aviation market freight insurer, but that insurer closed down and, um, I came in 78. The insurance company closed down. In 89, [00:33:00] right? No. Is that right? No, that's completely wrong.
[00:33:03] Anyway, it goes down five years later, we're at 83. That's why when my eldest son was born, I then took a year off and my oldest son was born. And then after that, even though I did enjoy being home with him, I did. And I have a huge respect for women that choose to stay home with their children. Because in that year, I found out it's really not very easy.
[00:33:26] It's actually very hard and harder. I believe that being at work for me, it certainly was.
Dr. Michelle St Jane: [00:33:32] I really agree with you. My husband and I had an agreement I'd spend the first five years home with them. Let me tell you, I was counting down to an empty nest. Then, I went to work and I was like, “you get tea breaks, you get lunch.”
Jill Husbands: [00:33:51] I was just about to say that that's actually exactly what I actually missed were conversations with adults about adult subjects, you know, not about what my son did today and that sort of thing. So, yeah, I stayed home over here and then I joined Johnson and Higgins (J&H). That, you know, then turned into Marsh.
[00:34:13] So from when I started at J&H until I retired, I was with the organization an extremely long time, but again, I enjoyed it. And that was when I entered the captive insurance industry. So that was late in 1983, uh, very late in the year, just after my son's first birthday. So I joined as what was called an insurance officer, which really was the person that designs and organizes the insurance programs that clients put into their captions.
[00:34:46] And I did that for several years and then I became manager of that department. And then I moved on to the sales side, which I must say I really enjoyed as well. Also. I think this was [00:35:00] actually one of the most. And I give Brian hu and Roger Gillet credit for this because they gave me this time. We have been talking about trying to put a particular product together, a new product that hadn't sort of existed before.
[00:35:16] And I kept talking about it because I believed in it and that sort of thing. So they said, okay, take a year and see if you can actually get this up and running. So that was a bit of a risk because I didn't know what I would be doing at the end of the year. I didn't get it up and running. And I worked very closely with a gentleman who's to this day, a very good friend, Glen Weber.
[00:35:38] He was in our New York office and Glen and I worked for a year put in green Island together. And a lot of the tech sort of the U S technical knowledge came from Glenn. I sort of supported him and helped sort of on the sales side and that sort of thing. So in 1997
Dr. Michelle St Jane: [00:35:58] Can you explain [00:36:00] what the Green Island treaty is because it may not be insurance professionals listening.
Jill Husbands: [00:36:06] Oh, okay. Well, it's sort of like, it's really just where people share risk with each other. That's sort of the easiest way to describe it. It's based on the law of large numbers, you know, clearly huge insurance companies have large fact sheets. And so they're able to sustain the ups and downs of the small individual risks.
[00:36:27] Well, many large fortune 500 companies have very large deductibles. They have to have large deductibles they're imposed on them. And so, but those deductibles can still. Create a significant amount of fluctuation from year to year in loss and companies don't want that. They want predictability. They don't want fluctuation up for very obvious reasons.
[00:36:51] And so, so Green Island brought stability to those low end deductibles that the fortune [00:37:00] 5,000 companies have. And so, um, so we went from there. I had two more sons along the way. No, no. The year sort of just went whizzing past. I have to say that. And eventually I became the head of the Bermuda office of Marsh Captive Management.
[00:37:16] And then I became the chairman of Marsh McLennan companies in Bermuda just before
[00:37:23] I retired.
[00:37:24] Dr. Michelle St Jane: [00:37:24] Just before you go on, can you explain what a captive is and why it's so important in the market?
[00:37:29] Jill Husbands: [00:37:29] Oh, okay. Yes, of course. The captive
[00:37:32] is an insurance company. That's owned by a corporation. So. Owned by an airline by a retail chain owned by, you know, w whatever the corporation does is steel manufacturer, a car manufacturer, and it's principally to ensure their deductibles.
[00:37:53] And also when there's a hard insurance market when there's lacking in capacity. [00:38:00] So for instance, you know, like in 1985, 1986, when ACE and Xcel were formed, they were all formed because of lack of capacity in the traditional market. And so companies use, or certainly back then when there was a huge lack of capacity, use their captives.
[00:38:18] To fill some of those holes so that they did actually have funding for those losses as a winner. And also captives can be much the same as the captive you worked for. They can also be groups of people in the same industry who come together because there's a particular need, you know, there's particular shortage of capacity in whatever industry they're in and they all come get together and insure each other again, so that there's stability for the individual companies.
Dr. Michelle St Jane: [00:38:50]
Absolutely. So for the bankers association, it was fidelity insurance. Basically as a person who has your banking with a bank there is a surcharge and the bank.
[00:39:04] Part of it to cover, bring in failures of any of the banks and the group. Absolutely. An ACE and Excel. They came in to fill the gap of excess property risks and also directors and officers. I remember when I was working, they provided directors and officers coverage from 5 million to twenty-five million.
[00:39:23] So there was a gap in the market. If you got caught in that gap, you had to self insure or do a placement as an example of filling the capacity.
Jill Husbands: [00:39:35]
Exactly. Of course they were actually just big captives when they formed. They were just huge group captives, you know. By insurance, you had to be an insured in the early days. You had to be a shareholder.
Dr. Michelle St Jane: [00:40:01]
Absolutely. If you don't mind, I'm just going to pop one little fact in here because we're talking about the 1980s and the Bermuda Monetary Authority, the regulator, announced in February 2021 that as of December, it was approximately valued at US$40 billion.
The Bermuda captive insurance market is significant because those are the global companies. Bermuda has 680 captives. That's huge growth.
Jill Husbands: [00:40:30]
It is. I don't have the numbers in front of me. There've been a lot of mergers and acquisitions over the years of various companies. I think the capacity that they have on their balance sheet has definitely grown significantly. Yes, that's absolutely true. Absolutely true.
Dr. Michelle St Jane: [00:40:57]
The current status is there are 680 captives valued around US$40. Billion. That's today and of course, bigger over the decades. I agree with you. They were massive in the nineties.
Jill Husbands: [00:41:15]
That's really my journey.
[00:41:20] Oh, another thing I just, I guess I would like to just chat about, cause I sort of actually really believe in this. I've always believed that when you get to a certain point or a certain position, I felt it was my job to ensure that I have people behind me who could take over and also that I could would step away so that they could still enjoy the career that I had enjoyed.
[00:41:47] I was very lucky in that regard as well. I had a great team behind me, a wonderful team. And so I just decided one morning I just woke up and said, okay, now is the time to retire.
[00:42:00] I called New York on that same day and told them I'd made the decision. We put a plan in place. The plan was actually 15 months in length, but you know, it was a great plan.
[00:42:11] It was good for me. Good for them. That’s almost four years ago, I retired and you move on to the next part of your life.
Dr. Michelle St Jane: [00:42:20]
I want to just pause and recognize that you were the inaugural Fred Reiss Lifetime Achievement Award in 2016. As the very first woman, you've stepped up for all of us and showing us what a career journey could look like if you're courageous, and stepping into it.
Dr. Michelle St Jane: [00:42:41]
I know you've been a conscious steward of this space, so I want to say thank you.
Jill Husbands: [00:42:48]
Thank you for that. I was, I was shocked that I was the first recipient. Very proud though, was a very humbling and proud moment for me [00:43:00] to have my peers. Who are mostly men, recognize me and give that to me.
[00:43:06] It was like a pinnacle really of my career because I had, in fact, I don't know, I don't think they would have known, I have made the decision, but I have made the decision to retire. Marsh New York and I put this plan in place, but it hadn't been announced that I was going to retire.
[00:43:26] Yes. It was a wonderful thing and still is a wonderful thing
Dr. Michelle St Jane: [00:43:30] For me, these decisions are going to ripple out because when I came back from law school, I had the chance to teach at the Bermuda Insurance Institute. I was very big fan of the market evolved in terms of meeting the needs and creating capacity.
[00:43:48] Opportunity so that global companies could do what they needed to do. You know, things like, Oh God, like technology, like the internet in the satellites. We were, we were underwriting, you know, we had [00:44:00] satellite insurance in the nineties.
I was teaching at the Bermuda Insurance Institute and I was invited to a committee set up to decide how could we recognize people in the marketplace?
[00:44:12] The committee came up with the lifetime achievement award and the market leader in the late nineties. My knowledge and passion for history Reiss was the choice for lifetime achiever. I felt and I'm sure Roger did as well we ought to recognized him post humorously.
[00:44:36] Fred Reiss was the first award recipient. I think it was 1998 or 99. Here you are, the award has moved over to his name, the Fred Reiss Lifetime Achievement Award started in 2016 and you're the first recipient. So wonderful. how this has come full circle in terms of a woman was chairing the committee recognizing this man post humorously by the committee that was forward thinking enough. I think it comes down to something you and I both do. We make the path by walking it.
Jill Husbands: [00:45:14] there were no woman brokers there weren't women in aviation, we had no one to emulate in some of the areas we've moved into.
Dr. Michelle St Jane: [00:45:24] So for that is a beautiful legacy and I'm really grateful to have the opportunity to capture your thoughts and share those so that others can be inspired by what
Jill Husbands: [00:45:35] you're welcome. And I just want to end also by saying, I think there's still a lot of work to be done in our industry, not just for women, but for all minorities.
[00:45:45] I do see that they're all. There have definitely been huge strides, especially for women. But I think that there is more work that the industry needs to do for minorities. And I'm hoping [00:46:00] very much that we see that in the years to come
Dr. Michelle St Jane: [00:46:02] absolutely diversity and inclusion and more voices, more choices.
Jill Husbands: [00:46:09] Yes
Outro: [00:46:12] Dr. Michelle St Jane is a conscious steward of meaningful leadership in the world and the wider cosmos. Tune in every Thursday for real talk around life leadership and your conscious journey. Be ready to create and cultivate your dreams and wholehearted desires. Your support is valued. Please follow, leave a review and a rating. More importantly, share with your connections.
Managing Director, Strategic Risk Solutions
Managing Director at Strategic Risk Solutions (SRS), a full-service insurance management business with operations in North America, Europe, Bermuda, Cayman and Barbados. SRS has been managing insurance companies for over 25 years and currently manages in excess of 600 insurance entities that collectively write $7 billion in annual premiums.
SRS is expanding its Insurance Linked Securities (ILS) practice, including Fund Administration, and this is an area of particular focus.
Joined SRS from Hamilton Insurance Group, a specialty insurance underwriter, where Jonathan was a member of the founding management team and Group Chief Financial Officer. Prior to leaving Hamilton, held the position of President, Strategic Partnerships which included responsibility for building out Hamilton's ILS platforms as well as managing third party syndicate businesses at Lloyd's. Served as a Board member of Attune, Hamilton's digital MGA joint venture with AIG and Two Sigma. Also responsible for sponsoring and overseeing the development of Hamilton's Diversity and Inclusion strategy.
Prior to Hamilton, was the Leader of EY’s Insurance practice in Bermuda (as well as Bahamas and Cayman), and had been with EY, in Bermuda and New York, for 19 years (1993-2012) and had been a Partner for 12 years (2000-2012).
While at EY, focused on serving organizations subject to US and UK listing requirements. This included providing assistance with IPOs and other capital raising activities. In addition, advised insurance companies with respect to internal controls and regulatory best practices, including compliance with Sarbanes-Oxley as well as Solvency II.
A Chartered Professional Accountant and a member of the Institute of Chartered Professional Accountants of Bermuda. Earned a Certified Public Accountant designation in 1995 and is a current member of the American Institute of Certified Public Accountants (AICPA). Also earned a Chartered Property & Casualty Underwriter (CPCU) designation in 1998.
A member of the Bermuda Government's Insurance Advisory Committee (IAC). The IAC is a statutory committee that meets monthly with the Bermuda Monetary Authority to provide guidance to the Bermuda Ministry of Finance regarding insurance industry matters.
A member of the Board of Trustees of the Bermuda Institute of Ocean Sciences (BIOS) and have been a trustee at BIOS for over 10 years. Also a member of the Board of Trustees of Saltus Grammar School, the largest independent school in Bermuda with over 800 students.
Author of 'Held Captive'
. Broke new ground as first woman CPCU in Bermuda and author of first book about history of international insurance in Bermuda. First woman to lead AIG Bermuda insurance operations.
. Chosen as one of 26 women in the 2020 class of AIG’s Women’s Executive Leadership Initiative (WELI)
. Consistently achieved or surpassed growth and retention goals.
. Chosen as one of 36 women leaders globally as a Fellow for the International Women’s Forum in 2018/19.
. Sought after speaker, writer, and program leader, locally and internationally.