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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance explores the challenges presented by today's business and economic upheaval, as well as the hardening insurance market, and what it means for the captive insurance industry.

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Does Your Captive Board Spend Most of Its Time Reviewing the Past? Should It?

September 29, 2014

By John Foehl

Telling the future by looking at the past assumes that conditions remains constant. This is like driving a car by looking in the review mirror.

—Herb Brody

In the prior article we introduced the concept of generative thinking, a method for trying to imagine the future. We all would like to know what the future holds. This is true for us as individuals and no less true for boards of directors of companies including captives. The problem, as the quote aptly points out, is that boards and management teams spend most of their time reviewing the past. Think of this in the context of your own board meetings. How much time is devoted to reviewing reports containing historical information such as financial statements, investment and claims reports, etc. All of this information is focused in the review mirror.

Over the past decade considerable attention has been paid to the role of governance in organizations. The authors Richard Chiat, William Ryan, and Barbara Taylor published a monograph titled “Governance as Leadership.” Their thesis contends that boards have multiple roles and responsibilities, including oversight of performance, fiscal integrity, and regulatory compliance. However, all of these roles are backward looking. Time consumed in these tasks leave little opportunity for the board to focus on its most critical task: the responsibility to advance the organization’s mission.

The authors define a framework for three distinct roles that boards are supposed to perform: fiduciary, strategic, and generative. Most boards operate within the first two roles and may only tangentially engage in the third. This results because the idea of generative thinking is not well known nor understood.

The authors define generative thinking as “a cognitive process for what to pay attention to, what it means, and what to do about it.” In this role the board is required to make sense of things by helping to frame challenges and opportunities and probing assumptions, logic, and values behind various scenarios. The board works on several key questions:

  • What are the new possibilities?
  • What’s coming next?
  • What are the new questions to be asked?

Now many of you will ask how is generative thinking any different than strategic planning? There are two fundamental differences; the first being the time frame involved and second being the use of scenarios to help make sense of the questions outlined above. Generative thinking is an effort to see into the future—5, 10, or even 15 years hence. Scenario planning is the tool employed to begin this visioning process.

In the next article we will begin to delve into the idea of scenario planning.

Learn more about the generative thinking process by reading the first part in the series.

John Foehl, who is coeditor of, currently serves at the president and CEO of Government Entities Mutual, PCC, a member-owned captive reinsurance company.

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