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Small captives making the 831(b) tax election tend to write coverages that are not commonly written by conventional carriers. The coverages may be for low-frequency, high-severity events. They may be for exposures the entity has historically retained. The exposure insured by the captive may be similar to coverages written by commercial carriers, but the breadth of coverage offered by the captive’s policies may be substantially different from that offered by commercial policies. In most of these cases, loss runs simply do not exist. Actuarial creativity becomes a requirement to develop reasonable funding estimates.
Pinnacle currently serves thousands of employers who manage risk through captive or self-insurance programs, including hundreds of small captive insurance companies. As a result, we can provide actuarial services to small captives confidently and efficiently. Through our collective experience, we have turned many common small captive actuarial constraints into strengths, including pricing approaches for numerous uncommon coverages, the right benchmarks to use, and applying appropriate risk margins.
You can contact me directly at any time to further discuss creative pricing approaches for small captives. Additionally, my colleague Rob Walling and I recently provided a continuing education webinar on these topics through the Casualty Actuarial Society. The webinar recording is available now through the University of the CAS - you must be registered with and logged in to the CAS website to view it. The cost of the webinar is $25.
For more information about Aaron, visit his People page.
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Pinnacle is an actuarial firm focused on property/casualty insurance, including alternative markets, captives, self insureds, enterprise risk management, predictive analytics, commercial lines and more. We serve trucking, insurance, health care, medical professional liability, reinsurance, workers compensation, public entities and other companies and concerns.
Our services include expert witness, loss reserving, litigation support, pricing, ratemaking, rate filing, statements of actuarial opinion, feasibility studies, capital modeling and other actuarial services and products.
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