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Captive Insurance Company Culture and Values Matter

Culture Matters Featured News
June 08, 2016

Culture and values matter in the captive insurance industry, believes coeditor John Salisbury, whose experience as a captive insurance company chief executive officer supports this conclusion.

"Culture and values are essential to the success of captives," Mr. Salisbury says. "It matters not only in captives that are internally managed but also in the firms that manage captives."

Mr. Salisbury's views are timely, considering that the A.M. Best monthly magazine, Best's Review, May 2016 issue (available to subscribers only) features a series of articles on how "Culture Matters" in insurance companies.

Neil Cantle, principal and consulting actuary at Milliman, suggests culture is something we can observe as an outcome. In his Best's Review article, titled "Cultural Compass," he states, "For many, it (culture) represents some sense of 'the way we do things around here.'"

How is the foundation of an "effective culture" built in a captive? There is undoubtedly more than one way to accomplish this, according to Mr. Salisbury.

"Organization effectiveness is to a substantial extent about attitudes and values of those who govern, manage, and operate the captive," says Mr. Salisbury. "It is about people."

Among the selected techniques used to help shape the culture in captives that Mr. Salisbury served as the chief executive are the following.

  • Board adoption of a clearly defined mission statement
  • Board adoption of a governance policy that incorporates the authority and responsibility of the board and that of the chief executive
  • Engaging staff as one step in defining the values to be practiced in daily captive operations
  • Using a behavioral job analysis assessment to determine the dominant behavioral style needed to effectively perform specific functions and including a description of those behaviors in the job description and incorporating that information as one of the factors in evaluating and hiring employees
  • Reinforcing values
    • Valuing the contributions of each employee 
    • Leadership's daily practice of the "shared values"

    • Publication of a "shared values" employee directory for use by staff and captive members

    • Making effective use the behavioral strengths and skill set of each employee

    • As part of employee performance reviews, assessing the consistency of their performance with the values of the organization

    • Celebrating the captive achievements with the captive members and among staff

    • Sharing in the profitability of the captive with employees to reinforce their identity as stakeholders

    • Encouraging, listening to, and recognizing new ideas and innovations of employees

    • Making work fun, supporting professional development, and caring about employee personal needs and family lives

  • Board approval of the business plan, annual work plan, and budget developed from bottom up in the captive and shared with employees
  • Assessing the attitudes of employees through an anonymous survey (a software application was used to accomplish this assessment) 

Here is a list of the shared values enumerated by all involved in one of the captives that Mr. Salisbury considers himself fortunate to manage:
  • We value people.

  • We believe in active, hands-on management.

  • We want to be the best at what we do.

  • We value paying attention to detail.

  • We make providing quality service to the membership of the companies our number one goal.

  • We strive to be innovative and creative.

  • We communicate to get the job done.

  • We promote the growth and profitability of the companies.

  • We strive toward a shared philosophy.

These values were incorporated and published in a staff directory shared with the captive membership, displayed one-by-one over a period of time as a screen saver on each staff computer, used in employee performance reviews, etc.

The captive membership, board of directors, employees, and the bottom line of the captives were all beneficiaries of these "shared values."

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