Insurance is a cash-intensive business. You pay your premiums, your overhead costs, manage your business so you don’t have adverse claims, and move your underwriting profit out to support your operating business. But what do you do with your money while you’re waiting for your money to turn to underwriting profit? You invest it, of course! That’s where captive insurance investment management plays a huge role.
As captive insurance managers, we, at Venture Captive Management, LLC, are not qualified to offer investment advice. It is our job to know insurance company regulations as they relate to your investments, which investment plans meet the insurance company statutes in your chosen venue, properly manage your cash flow, and account for your investments.
In keeping with our philosophy of turnkey management—knowing what professional services you require and offering qualified business partners—we have developed business relationships with partners who understand captive insurance investment management. They work with our team to evaluate cash pay-out patterns, invest according to your investment plan and risk appetite, and provide relevant monthly detail to incorporate in your monthly financial reports.
Of course, financial markets are not static. Your financial plan will include projected distributions of asset classes as well as anticipated returns. We review this plan at least annually. In the interim, we have regular strategic conferences with our clients and advisors to discuss any changes our clients might wish to make or just to get a better understanding of market conditions.
Institutional investing is more concerned with cash preservation than growth. Regulators are more concerned with insurance companies being able to pay claims than whether or not companies invest profits. Therefore, regulations are written to provide very conservative guidelines. Still, our clients’ accounts continue to meet or exceed the benchmarks for their investment classes thanks to proper captive insurance investment management from these professional business partners.
At VCM, we are constantly monitoring investment strategies and market conditions to make sure our clients’ money is working as hard as our clients are.