A "captive" is an insurance or reinsurance subsidiary of one or more companies that allows the holding company to insure risks.
Distributers or endorsers of significant sums of insurance premiums use captives in order to benefit from insurers' underwriting profits.
Captives are typically used to cover risk of damage, goods and responsibility. An increasing number of companies resort to captives in order to cover the risks associated with group insurance and pension plans.
Establishing a captive requires varied expertise on the part of consultants, who must excel in all aspects related to flow-through mechanisms and risk financing. Consultants must also have in-depth knowledge of actuarial science, accounting, finance, taxation and reinsurance.
Our professional services include:
- Analysis of historical claims experience
- Feasibility studies (actuarial modeling of risks, analysis of retention cutoffs, absolute risk, financing and reinsurance methods)
- Business plans/Financial projections
- Request for proposals, selection of providers and other professional resources
- Actuarial liability (reserve) evaluations
- Appointed actuary certificates
- Investment and matching policies for assets and liabilities
- Communication with external auditors
- Management committees, Board of Directors
- Insurance and reinsurance documentation