Lancaster County Solid Waste Management Authority (LCSWMA) formed a Vermont captive earlier this year as it needed to think “outside of the box” to achieve better stability, capacity and pricing.
Market hardening around 2017, particularly in the power generation market, was one of the main reasons why the Pennsylvania-based Authority decided to launch its captive.
CFO Dan Youngs said in an exclusive interview with GCP that “it became evident that we had to think outside of the box for a longer-term solution”.
He added: “We needed to create a solution that gave better control, that allowed for direct communication with underwriters to really showcase our best-in-class safety and operating standards.”
Youngs said he felt the organisation was “undervalued” by the commercial market considering its “near stellar” track record and loss history.
He said that the pure captive quickly became the solution to these challenges and that it allows LCSWMA to manage its coverage and sub-limits more closely.
The CFO believed that there’s more scope for like-minded organisations to set up their own captives and potentially work with LCSWMA on their insurance programmes in the future.
“I think that’s something we’re looking to do and reaching out to others,” Youngs said. “When you look at complex engineered risks…there is a very active interest in captive formations.”