Trumping your Insurance Co. w. Wesley Sierk III

7 snips

Jan 20, 2022

Wesley Sierk III, President and Lead Strategist at Risk Management Advisors, is a specialist in captive insurance and risk mitigation. He discusses why businesses should consider creating their own insurance entities for tailored risk management. Wesley highlights unique challenges within industries facing insurance struggles, emphasizing the strategic investment potential of insurance companies. He also shares insights on wealth management pitfalls, the benefits of captive insurance during crises like COVID-19, and practical advice on building financial resilience.

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INSIGHT

Captive Insurance Explained

A captive insurance company is owned by the insured business, covering various risks.
Reinsurance protects the captive by transferring some risk to the global reinsurance market.

ADVICE

Who Should Consider Captive Insurance?

Businesses spending over $1 million annually on insurance should consider captives.
Suitability depends on factors like claims history and reinsurance costs.

ANECDOTE

Captive Insurance for Construction

A regional construction company can use a captive to insure projects and operations.
Reinsurance helps mitigate long-tail risks like construction defects.

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Key Points From This Episode:
• Wesley shares the realizations and learnings which led him to found his company, Risk
Management Advisors.
• An explanation of what captive means in the context of insurance companies.
• When it makes sense for a business to set up their own private insurance company.
• What captive insurance can look like in the construction industry.
• The industry which struggles most to get insurance.
• Different laws that govern insurers and reinsurers.
• Why Wesley refers to insurance companies as investment vehicles.
• How Risk Management Advisors help their clients get a much higher yield.
• What Risk Management Advisors do and don’t do for their clients.
• Costs of setting up an insurance company, and the management fee that Risk Management
Advisors charge.
• Examples of things to be wary of in the insurance industry.
• The importance of buying reinsurance.
• Good claims versus bad claims.
• How captive insurance can benefit private equity.
• The premise of Wesley’s first book, You Can Make It, But Can You Keep It?
• Wesley shares some examples of where things can go wrong when moving money offshore.
• Advice from Wesley around building financial resilience.
• Why you shouldn’t name your business after yourself.
• Where the value of a business lies.
• A strategy Wesley recommends for holding onto your money.
• How companies with captive insurance benefited during the COVID-19 pandemic.

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