An over reliance on the commercial insurance market led to the Americas region of GEODIS to establish its own single parent captive, according to Justin Bahorik, director of insurance & risk management.
GEODIS is a world leader in transport and logistics with expertise in all aspects of the supply chain. Globally, GEODIS is headquartered in Paris, France with the Americas Region based out of Brentwood, Tennessee.
In April 2022, GEODIS launched its first single parent captive domiciled in Tennessee and is being managed by Aon.
Bahorik explained the motivation and plans for the captive in GCP #83.
“When you’re fully reliant on commercial markets, you have to pay what they tell you you’re going to pay with no other options,” he said.
He gave the example that their workers’ compensation premiums had continued to rise despite always outperforming the industry and losses never breaching the retention.
Bahorik explained: “We weren’t being fully rewarded for our hard work in safety and innovation and with a captive, our rates are determined using our own experience and not the industry as a whole.”
Bahorik said it’s been a very positive first year of operation and the company is looking to expand the captive in the near future.
“We definitely want to expand,” he added. “So far we’ve taken a crawl, walk, run approach to ensure we are building a strong base and all stakeholders are comfortable with the process.”
He highlighted that the captive first began by writing a deductible reimbursement policy for workers’ compensation and auto, but has recently added a truck broker liability policy that is written specifically to address the unique needs that GEODIS has in this area.
“Not only can you reduce dependence on the commercial markets, but you can also write policies that benefit the policyholder which in this case is GEODIS,” Bahorik said.
“We were able to include language that filled a gap that we were not able to find commercially.
“The benefit of a captive is not realized in the short term. This is a long term investment.
“We want to position our captive for success by carefully adding coverages that provide value to the business while also protecting and building the captive’s balance sheet.
“Our hope is that in 5 or 10 years we will have a sizeable surplus that we can utilize to provide even greater stability to the business.”
Listen to the full interview with Justin Bahorik in GCP #83, which also features interviews with Jayesh Patel, Global Head of Market Practice Management for Multinational at Allianz Global Corporate & Specialty (AGCS), and Olga Collins, CEO of the Worldwide Broker Network, and John Harris, Group Business Development Director at Robus Group.