The poor relation?

Clive James, consultant, Kane Group 02/02/2010

As we move into the new decade, it seems that even those in the captive sector are now being seen as a part of the ‘greedy’ financial sector and the bonus-driven culture.

With this in mind, I am constantly made aware of the fact that we in the insurance industry do not charge appropriate fees, nor do we put real value on the IP which we bring to the marketplace.

We are often seen as the ‘poor relation’ when compared to some of our colleagues who are commission-driven rather than fee-based. The revenues which we generate are, therefore, determined by the marketplace and not by the real IP, which is based on the added value or measurable benefit to our client base.

Within the captive and risk management arena, we need to make sure the value we bring to the marketplace is more measurable and tangible to our clients. This can be demonstrated in terms of ROCE, improved risk management techniques and awareness, or simply down to premium savings.

So how do we show our worth to the world and ensure that we generate a fee more commensurate with the value which we contribute to our client base?

The simple answer is that we need to be measured in absolute terms for this value that we bring. Like lawyers and accounting professions, we in the captive sector put together complex structures - normally offshore and around the globe - and save corporate clients millions of dollars, increasing share price and corporate reputation.

However, our perceived value is normally measured in administering an offshore company and not the true value to the client.

In this new decade, the captive industry needs to be more innovative and dynamic in the way it provides value to its clients and to ensure that it clearly demonstrates the myriad benefits that it brings if we are to earn the fees which we deserve.