Amidst prevailing challenges, Vermont stands robust and poised to overcome them, affirmed Sandy Bigglestone, Deputy Commissioner of Captive Insurance at the Vermont Department of Financial Regulation.

Speaking on the concluding day of the Vermont Captive Insurance Association (VCIA) annual conference, Bigglestone, alongside Mike Pieciak, Vermont State Treasurer at the Department of Financial Regulation, and Gail Newman, Vice President of Risk Management at Bright Horizons, examined the multifaceted issues impacting the state.

The panel initiated discussions by addressing the recent banking crisis in the US. They concurred that while uncertainties loomed during that period, the Federal Government and regulators intervened effectively to manage the situation.

The panel anticipated further challenges in the banking sector due to ongoing consolidation and mergers, which might particularly impact smaller banks in Vermont.

Moreover, the panel delved into the implications of inflation on captives. Notably, captives remain susceptible to the global upheaval affecting insurance markets, with persistently elevated rates. Despite inflation’s gradual decline, the panel emphasised that insurance markets might not align exactly with broader economic trends.

However, the panel illuminated an opportunity for captives amid this turbulence. As companies reevaluate risk attitudes amidst rising premiums, captives can provide a solution for those grappling with increased premium rates from conventional insurance coverage. Bigglestone highlighted that Vermont regulators are vigilantly monitoring the inflow of private equity into the captive market.

In the realm of climate change, the panel addressed the thin margins in the global property insurance landscape. Captives can play a vital role by offering additional options to address the evolving landscape of environmental, social, and governance (ESG) issues and natural disasters.

Demographic challenges also garnered attention, as the panel discussed unfunded pension liabilities and an aging population. Recent developments, however, have seen active efforts to tackle these concerns and an influx of younger individuals into the state, despite posing a housing shortage and childcare-related concerns.

Finally, the panel acknowledged existing challenges but expressed confidence in Vermont’s capacity to navigate them adeptly.