In my final column on the captive industry, I will focus on the one question I've been asked about the captive insurance industry - how does one get into the industry?

The captive concept has been around for a long time and it has evolved significantly from its original intent of insuring just the risks of its parent company. In addition, many risk managers today have a better understanding of insurance because they have studied it and therefore, demand more from their brokers and insurers. Brokers also have a better understanding of captives. Bermuda over the years has sold the captive concept from a variety of different perspectives and is therefore reaping many of the benefits of the renewed interest in captives.

As a result, Leslie Robinson finds that sophisticated risk managers now realise just how beneficial captives can be to providing stability to their entire insurance programme. Therefore, captives have now become an integral part of their overall risk management program.

Leslie says her skill set has definitely changed because she has to understand the industry group she is working with, what problems risk managers are encountering as a result of cutbacks in the traditional marketplace and what their new exposures are as a result. Leslie says in the early days all she had to know was how captives operated now she has to assist captives in finding solutions.

She gives the example of a captive that owns a workers compensation trust and wants to establish a captive.

Leslie must understand what they do, the state regulatory environment in which they operate in the US and then she must be able to point them in the direction of which type of captive is best suited to their needs.

She must be able to assist them in deciding whether they need fronting, reinsurance, etc. In order to be in a position to respond to her clients needs, Leslie says she must be able to understand their total needs to offer proper solutions to those needs.

Leslie says the captive industry is no longer looking for bookkeepers to help develop captive programmes. Instead the industry desperately needs people who understand what a captive can do and can develop programs accordingly.

For anyone wishing to enter the captive industry, Leslie offers the following advice:

1. Have a degree in business, not necessarily insurance;

2. Have either a professional designation or be willing to work towards one;

3. Be prepared to start out as a technical assistant;

4. Show willingness to work your way up demonstrating that you have the initiative to work hard and study;

5. Have the ability to interpret policy wordings; and

6. Be able to understand the insurance and reinsurance market structure.

Leslie says there is plenty of opportunity in the accounting side of captives. She says there are many jobs in captive management but you need to know and understand accounting to have the ability to understand insurance accounting.

Young Bermudians interested in accounting could enter the captive industry by becoming an accounts administrator while working towards a professional designation. They could even go through the Bermuda Insurance Institute to obtain basic insurance accounting knowledge. They can also learn about insurance through courses like the INS series, which is a basic introduction to insurance.

Many Bermudians, Leslie feels, overlook the accounting side of insurance because it seems that only the frontline jobs like underwriting and broking seem to be pushed.

She also says young Bermudians should try to work with the auditing firms because they audit all the insurance companies on the island therefore they have access to who is looking for what in the industry.

Leslie points out that with the globalisation of the insurance industry, any person with the ability to speak another language is a bonus. She says she deals with people who do not speak English as their first language all the time.

Writing skills and telephone etiquette are paramount because you will be required to transact a lot of business long distance and people must be comfortable with you in order to want to do business with you. Take a writing course to

A good understanding of business etiquette is also very important. According to Leslie, people that want to do well in this business must understand it is not a 9 to 5 job. They must be willing to put in the time necessary to complete the job. Leslie says she often comes to the office at 7 am if she wants to speak to London before they go to lunch and often does not leave before 6 p.m. because she must make sure she is available for her US colleagues who are one hour behind Bermuda.

Leslie matter of factly believes that networking is the key to success in Bermuda. She advises anyone interested in climbing the corporate ladder to attend as many functions as they can to meet people. Shrugging off insurance functions under the false belief that they are not a part of the job is a common mistake amongst the newcomers to the industry. The people that are the most successful are those that make themselves the most visible.

Looking back over the last 13 years, Leslie believes she has made the right decision to remain in the captive industry because of the depth of insurance knowledge she has acquired. She is also one of the few Bermudians in a senior position in captives.

And as Fitch recently announced, "the hardening market in 2002 has led to increased deductibles, reduced capacity in certain sectors, and limited coverage for certain risks and tighter security requirements through higher minimum credit rating thresholds. Corporations, therefore, are turning to their captive insurance company, or are considering the establishment of one, as a risk management solution."

Therefore, suggesting that captives will increasingly be used as an alternative risk solution. Now is as good a time as any to get into the captive industry while it is on the cutting edge and looks to become the wave of the future for the ever changing insurance industry.

@EDITRULE:

lCorrection of Life column published October 21, 2002: It has come to my attention that in my October 21, 2002 column about the life industry, I named Swiss Re as a life insurer in trouble when in fact the company should have been Swiss Life, a completely different company from Swiss Re. My apologies to Swiss Re for the error.

@EDITRULE:

Cathy Duffy is a Chartered Property Casualty Underwriter (CPCU) and is now a freelance writer. She is a former executive of Zurich Global Energy and has 15 years experience in the insurance industry. She writes on insurance issues in The Royal Gazette every Monday. Feedback crduffycwbda.bm