2017 Vermont Report

Eight Questions for Dan Towle  

Risk & Insurance® speaks with Dan Towle as he departs from his long tenure as director of financial services for the State of Vermont.
By: | April 7, 2017 • 5 min read

R&I: How did the captive industry in Vermont evolve during your 17 years there?

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When I first started in 1999, the captive insurance landscape was very different. Being “on-shore” meant Vermont or Hawaii and the “off-shore” jurisdictions held much more of a dominant position in the marketplace. We spent more time explaining to risk managers what a captive insurance company was and why you might want to form one. There were only a small number of captive insurance conferences, and there was plenty of business to go around.

Fast forward, and every year new states were passing captive insurance laws and the captive marketplace was much more competitive. The fact that we now had dozens of domestic domiciles trying to grow their business elevated the captive insurance knowledge base to a broader audience. The marketplace was changing and our messaging had to evolve and sharpen for us to continue to differentiate ourselves.

Daniel D. Towle, former director of financial services. agency of commerce & community development, State of Vermont

I truly believe that the “new entrants” to the domicile marketplace were good for the industry.

The state made some big investments to effectively differentiate ourselves in the marketplace. We invested significantly in our overall market research and branding efforts. That sent a message to the marketplace that Vermont was not slowing down or becoming complacent, but instead was working hard to reinforce our value proposition.

My role changed quite a bit during that time. I grew into not only being our chief marketer, but also one of strategist and as a leader along with my colleagues. We are more effective with more leaders echoing the same messages, which reinforced the “deep bench” we have in Vermont.

It has been a great experience working here. I had the opportunity to work under four different governors and alongside legends Leonard Crouse and David Provost. I have learned from them all and am grateful for their hard work and commitment to building our captive insurance industry in Vermont.

R&I: Any idea what the number of licensed captives in the state was when you started and where that number stands now?

When I started in 1999, our year-end number for captive insurance companies licensed was 460, our 2016 year-end number was 1088.

I have been with the state for more than 600 of our captive insurance companies licensed, which is more than half of all the captives licensed in Vermont’s history. When I first started, our total gross written premium was $4.2 billion, now it is more than $27.5 billion.

R&I: One of the keys to Vermont’s success as a captive domicile has been the relationship between state government and its elected officials. What do you feel are some key reasons and lessons learned?

We have always worked hard to make sure that the governor’s office and legislature understand the value the captive insurance industry brings to the state. We partner annually with the VCIA to go to the legislature and make sure that they understand what our industry means to the state’s bottom line. We also meet with legislative leaders to make sure they understand about captive insurance and how important an industry it is to our state. We also introduce and pass new captive laws every year.

The bottom line is that we are all in this together and are successful because we are all stakeholders.

Forming a captive can help prevent losses and saves a company money and they can reinvest their savings into preventing future losses.  That is what needs to be shared more consistently.

R&I: Have Vermont’s elected officials had an important impact on its captive industry?

I have been fortunate to work closely with many hard working government officials. A good example of this comes from the very top.  In my role, I would invite the governor to attend events important to the captive industry, or meet with a prospective captive or perhaps meet with an existing captive owner and their boards of directors.  During my time with Govs. Howard Dean, Jim Douglas and Phil Scott, they accepted every meeting request that I have ever put forward to them. That is quite extraordinary and speaks volumes to their commitment to Vermont’s captive insurance industry.

R&I: What accomplishments are you most proud of?

I am proud of our collective work and despite all the competition, Vermont still maintains its top position. I think I am most proud that for 17 years I was still passionate about my work, my colleagues and my clients.

I am also proud to be recognized alongside my colleagues Dave Provost, Sandra Bigglestone and former colleague Len Crouse, in the “Power 50” ranking. The “Power 50” recognizes the most influential and powerful individuals in the global captive insurance industry as voted on by industry peers.

R&I: What are some of the more nagging misconceptions about captive insurance?

Our industry collectively needs to better tell the story about why we form captives and how they benefit their companies. We need to effectively communicate how improving risk management is the primary driver and how having a captive can help a company better manage their overall risk. Forming a captive can help prevent losses and saves a company money and they can reinvest their savings into preventing future losses.  That is what needs to be shared more consistently.

R&I: What are some emerging or dynamic risks that companies might want to be looking to captives to manage?

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Any hard to place line of coverage can be a risk that fits in captive insurance. Especially if they have limited availability, high cost and many exclusions. Things like cyber and medical stop loss are risks we are seeing more interest in going into captives.

R&I: If you had one piece of advice for your successor in Vermont, what would it be?

Stay the course. Our basic strategy has not changed over the last 36 years. That’s been to license quality companies and regulate them in a way commensurate with their risks.

My other piece of advice is to only chase quality, not sheer numbers and to stay true to the brand. It has served us well during my 17 years, and I expect will continue to serve us well for the next 17. &

Dan Towle will begin his new role as president of the Captive Insurance Companies Association on April 24.

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2017 Vermont Report

A Perfect Fit

Life Time Fitness finds a captive home in Vermont.

Vermont Eyes Agency Captive

An agricultural consortium is one group taking a serious look at forming an agency captive in Vermont.

 

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

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