This PMA Captives Conversation features Todd Welch, CEO, who runs the highly successful Charter Partners captive program. Members of PMA’s Specialty Markets Division Jeff Packard (Assistant Vice President) and Glen Stapleton (National Sales Executive) will ask him a few questions so we can learn all about Charter Partners. Let’s jump right in.
Jeff Packard (JP) & Glen Stapleton (GS): Hi Todd. Thanks so much for joining us today. What was the genesis of Charter Partners?
Todd Welch (TW): The idea of Charter Partners originated years ago with a challenge that my father faced in his business. My father, Scott Welch, was an insurance broker in Washington, NJ. A large part of his client base was focused on schools and municipalities in northwestern New Jersey. The group was faced with substantial premium increases with their insurance renewals, despite the overall experience of the group. As a younger man, I witnessed the stress it created for my father and his customers. He responded to the challenge by bringing key representatives from each school and municipality into a group meeting to share ideas and solutions. A decision was made for this group to organize and conduct a study focusing on their combined experience. This led to a rollback of the rates and the beginning of a joint insurance fund. It was a tremendous success for all parties involved. Reputation and integrity were not just words for my father. His word was his bond. He faced the challenge head-on as I watched this transformation take place. Adversity turned into a spirit of consultation and teamwork and led to the formation of a Joint Insurance Fund (JIF) , which is like a captive. The sharing of information and solutions was powerful and sustainable. This became the model for Charter Partners when my brother Glen founded the captive in July 2000.
JP/GS: Todd, thank you so much for sharing. The personal story that inspired Charter Partners is something many of us can relate to and we see similar dynamics in many other group captives. How is Charter Partners different from other group captives?
TW: In one word, community. Insurance is fundamentally about people watching out for each other – sharing risk. We liken it to the Amish model of helping our neighbors when a house burns, or a barn needs to be raised. People take care of each other. Charter Partners is committed to partnership, transparency, and sharing best practices. A lot of captives have lost track of the very reason they were founded – a sense of community and collaboration. Also, we love partnering with insurance brokers. Brokers play a critical role in the success of our captive. We think brokers get marginalized with some group captives. We honor the role of the broker and respect the importance of their role in our community.
JP/GS: What do your members view as the tangible and intangible benefits of being part of the Charter Partners Insurance Company?
TW: The tangible benefits are obvious – control, control, control. All entrepreneurs want this. They want the same thing with their insurance expenses. They want to have a say in who joins their group and how claims are paid. They work hard to form, develop, and sustain successful companies and deserve to receive a monetary stabilization of costs along with distribution or dividends. Control and financial benefits are key, tangible outcomes. The intangible benefits center around a sense of community. Someone has my back. They care about me. Innovation and best practices are shared among the group. The group learns together how to make improvements. Insurance is best when it’s done in a caring, transparent, and ever-improving community.
JP/GS: Todd, is Charter Partners a heterogeneous or homogeneous group captive? What coverages are available in the captive?
TW: Charter Partners has cells for both heterogeneous and homogeneous groups. We partner with brokers who control and specialize in specific industries or pods and want to take their clients to the next level. Workers’ compensation, general liability, and automobile liability / physical damage coverages are available to our members.
JP/GS: What do you think the future holds for the captive industry?
TW: Captives are the future of the industry. As captives become increasingly simple and understandable many more companies will choose to transition from the traditional market. Company owners will be looking for agents who can introduce them to a captive of their peers, who share knowledge and engagement. The future of the captive industry is very bright.
JP/GS: Any big plans on the horizon for Charter Partners?
TW: We at Charter Partners intend to be a significant part of the captive transformation! We would like to help as many insurance communities form as possible. To that end, we are building communication systems, reinsurance models, and a network of agents and reinsurers to facilitate this process.
JP/GS: Give us a final thought. Any topic. Your choice.
TW: The captive industry has an opportunity to create real change for people. We are in a unique position to foster an environment of safety, caring, and financial stability for our members. This leads not only to positive financial results but adds value in an otherwise disconnected and competitive space. It is a tremendous opportunity to help connect like-minded people to be a positive force in the business world. We are thankful for the opportunity to have a role in this endeavor and encourage our peers to continue to raise the bar as we set new standards for community insurance.
