The first-known student-run captive insurance company has been formed by students enrolled in the Davey Risk Management & Insurance Program at Butler University’s Lacy School of Business in Indianapolis, Indiana. The genesis of the program was thanks to Zach Finn, Clinical Professor and Director of the program, who was looking to provide students with real-life, practical insurance learning experiences and showcase how exciting insurance as a career can be.
“We identified risks we might want to write and underwrote those. We identified loss-control recommendations and specimen policies and talked about rating and audit, and just everything,” said Finn. “I’m a big believer that all business education should be a mix of academic and experiential.”
The captive, MJ Student-Run Insurance Company Ltd, set to formally open for business in August, is domiciled in Bermuda and will self insure a number of risks for the university, including its celebrity mascot, a bulldog, its fine art collection and student-run businesses.
“We’re the first university I know of to have a student-run captive,” said Finn. “Other universities have told us we’ve now disrupted the market – that we are basically akin to the first finance program to have students manage an endowment. Many believe that in the next 20 years, this will be the standard for insurance and risk education.”
The students were assigned to conduct a feasibility study last fall, which also included determining the domicile of choice for the risks they wanted to insure. Bermuda topped their list and the students received news of their licensing approval from the Bermuda Monetary Authority (BMA) during a visit to the island last month where they met with members of industry and the Bermuda Business Development Agency (BDA).
“Butler’s recognition reaffirms the fact of Bermuda’s top-tier qualities; its independent analysis validates what many in the risk solutions industry have long determined,” said BDA CEO Ross Webber. “The students’ research and application is a wonderful endorsement of Bermuda’s strengths, responsiveness, and robust, agile regulation. These attributes have made our jurisdiction the world’s leading captive domicile for several decades.”
Students were also assigned with selecting service providers of the captive including a firm to manage the captive. “It has been a privilege to partner with Butler University and assist with the formation and management of what is believed to be the first US student-led insurance company,” said Anup Seth, Managing Director of Aon Insurance Managers Bermuda.
“This was the coolest project I have been a part of in my four years at Butler,” said Brad Weber, 22, who, after graduating next month begins his first job as a risk analyst with a manufacturing multinational serving the aerospace industry. “This captive was formed to change the way insurance is taught in schools and help alleviate the current talent crisis in the insurance industry,” he said. “It’s already serving that purpose.”
Caitlin Morgan Captive Services provides clients with captive insurance solutions supported by years of experience in establishing the successful formation and implementation of a wide range of captives. To learn more about how we can help you, please contact us at (855) 975-4949.
Sources: A.M. Best, Bermuda Business Development Agency (BDA)