Category Archives: Captive Management
Tips On Setting Up and Managing Your Offshore Captive Center
So you and your company decided to put up an offshore captive center in another country. The research that led to this proposal (that led to its approval) would have told you that you will have to exert more effort and put in more time in order to properly manage you captive center. Here are a couple of tips that can help:
Be Patient In Setting Up Your Offshore Captive Center
With less costs and big savings as a purpose for companies to set up their own captive centers, it sometimes flies out of their minds that setting up a captive still needs sufficient resources (including financial resources) and time to be finally completed. One thing that every businessman should bear in mind always is that if you do not want to waste any more time and any more money on expanding your business, you better do it right. And in order to do it right, you shouldn’t hurry the processes in building your offshore captive center.
Participate Actively In the Negotiations
Legal counsel in the negotiations for your offshoring venture is important. But so is your participation as the owner and leader of the negotiations. As the leader in the offshoring project, it should be you who should lead the negotiations, and the lawyers and the advisory team should stand by as support. If you want your offshoring project to proceed as smoothly and as speedily as possible, it’s better to participate in the negotiations and the processes as much as possible.
Outsourcing Centers in Asian Countries
Asia has long been a favorite for destinations for offshoring and outsourcing centers. Among the many countries in the continent, four countries have made their mark in the business of offshore and outsourcing staffing.
India: India is in the lead when it comes to offshore services and outsourcing centers in Asia. The country has established itself strong in both IT and non-IT outsourcing areas, and also has an attractive rate in scale and cost of labor. It has a very large pool of labor and manpower, and the employees are trained to meet the demands of a market bent on technology and telecommunications. Foreign investors looking to set up an outsourcing center in India will only have to expect infrastructure problems and inadequate local and international connectivity. There is also the issue of privacy and security laws, as India lacks breach notification requirements and privacy legislation that equal that of the laws of U.S.
China: China is not likely be left out in this business of outsourcing centers. The country is proving to be competitive, too. Its labor size and costs is competitive relative to other offshoring destinations. There is the problem of language barriers, however, and sometimes investors have to pay a premium to get hold of personnel with English-language capabilities. There is a lack of English fluency in the country that makes it difficult for Americans to conduct their business. Other problems that foreigners have to contend with in setting up outsourcing centers in China are the country’s copyright laws and intellectual property rights regarding IT software, and the inner-country competition (wherein you cannot trust what one province has to say about another province because most probably they are just badmouthing each other).
SEO of Offshore Captive Centers, Part 2: E for Establish
After we have discussed the first phase in building your company’s offshore captive center, we will now go over the elements to be considered in the second phase of the SEO for offshore captive centers. In this next level, the strategies and plans you made out in the beginning will be put into action.
E is for “Establish,” and this is the next phase in the SEO of building your offshore captive center. In this phase, your company’s strategy from the first phase is put into fruition. Proper channels and regulations should be recognized in this plan of action. With your captive center strategy laid out, it’s time to make your plans and operations more detailed and clearer.
Assign roles and responsibilities in the management of the operations. The team for the project should employ good governance and stick to regulations for the center. With the organizational responsibilities established, there can be a solid chain of command for the operations and processes. This will allow for the smooth flow of directions and procedures. It will also minimize any mistakes or miscalculations on the project.
With the management structure in place, it’s time to go down the organizational chart and take care of other details such as the infrastructure and staffing of the offshore captive center. With the infrastructure, make a detailed plan for office space. Don’t forget to consider sufficient office space, workstations, conference rooms, etc. You may also want to think about where to put the rest rooms, and maybe also a pantry for the employees.
Captive Management
Captive Management or the risk management is the way or the process of a captive insurance company which can invest income on premiums and reserves, coordinate the work of contracted services providers, and immediate benefit from improvements on loss control and claims experience, among other responsibilities. The company basically forms its own insurance company and can gain greater control by owning their own assurance group. The International Risk Management Limited (IRML) in Bermuda in 1962, was the first captive management company created by the “father of captive insurance”, Frederic M. Reiss. Most of the captive management is usually outsourced to a captive manager that holds the primary license for the captive. Some of the advantages in using captives to provide better risks management are: Cost, Flexibility, Claims management and Claims experience benefit.
Cost. The premiums charged include amounts to cover the insurer’s profit. Low cost of reinsurance allows the captive to build its reserved base.
Flexibility is taking the advantage of appropriate portions of its risks whether on a soft or hard market.
Claims management is the process of handling the cutting down on delays and bureaucracy that are often part of the claims handling procedure of insurers.
Claims experience benefit is when claims experience is better than anticipated, the excess net premium is retained by the group.
There are numbers of companies and affiliates focusing on captive management that offers full-line of insurance products, as well as commercial property, specialty risk and worker compensation, most of these groups are available to some of the main captive domiciles such as; the United States, U.K, Bermuda, Singapore, British Virgin Islands, and more.
Captive management indeed is a tricky business that needs expert schemes, planning and strategical handling, which could contribute in the overall success of the insurance company.
