Captive Managers

The Pinnacle team was very responsive and helpful on every aspect of the engagement, including several ad hoc information requests made by the auditors.

— Captive Manager

Services

Captive Managers

As a captive manager, you need a trusted actuarial advisor who is not only technically competent but can also communicate in plain language while offering outstanding insight, analysis and service.

We offer a full range of actuarial services specific to the needs of captive managers. From traditional services, such as loss reserve and funding analyses for exposure within deductibles or self-insured retentions to comparing alternate program structures with retention levels to feasibility studies, we have the expertise necessary to help you drive better business decisions.

Pinnacle has expertise in a wide variety of lines of coverage, alternative risk transfer structures, regulatory jurisdictions and industry niches. Our expertise has been developed by our team of experienced consultants who understand the specific needs of captive managers, but also with the local knowledge unique to individual market segments.

As nationally-respected experts in alternative markets, we also offer a full range of actuarial services to a wide variety of self-insureds, including traditional loss reserve analysis for exposure within deductibles or self-insured retentions. We regularly assist clients to comparing alternate program structures, analyze retention levels and developing feasibility study documents. Regulatory authorities in jurisdictions around the world respect our quality work.

We understand the insurance challenges public entities face and we are equipped to help you meet them, regardless of your insurance program and service providers. We’re well versed on the Governmental Accounting Standards Board Statement No. 10, and understand the impact for state and local governmental entities, their public entity risk pools and other relevant accounting guidance.

Our commitment to captive managers goes beyond the basics to understanding the unique requirements of your specific industry, providing insight to a range of likely outcomes and providing you with the intelligence you need to succeed.

Case Studies

Cayman Captive
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Cayman Captive

Pinnacle serves many of the largest group captives in the world, many of them domiciled in the Cayman Islands. These reserve analyses are typically produced twice a year and serve multiple purposes. First, they provide a range of reasonable estimates which management uses to determine their best estimate of ultimate losses and unpaid claims liabilities. Second, these reserve estimates can then be allocated to individual members to determine the outstanding liabilities and potential future assessments, if any. Finally, the allocated ultimate losses become the basis for renewal pricing estimates for each member. Pinnacle’s approach to estimating and allocating reserves in group captives is unique in the industry and sets our alternative practice apart with its efficiency and accuracy.

Formation
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Formation

In an effort to attract and retain quality physicians, a large integrated healthcare system operating in the Midwest decided to create a physician’s professional liability insurance (PPLI) alternative to the commercial markets. After a comprehensive feasibility analysis, an offshore captive insurance company (CIC) was capitalized and formed. Pinnacle actuaries were engaged to assist in the feasibility analysis and implementation of this strategy. Pinnacle’s involvement began by assisting the captive manager to develop appropriate assumptions that were incorporated into the CIC’s proposed business plan and filed with regulators. Initially, Pinnacle performed a comprehensive analysis of the current PPLI market to develop base rates, rating factors and underwriting guidelines. On an annual basis, Pinnacle re-evaluates the base rates and rating factors and recommends adjustments to reflect current trends in the market as well as credible indications borne out of the CIC’s experience. In addition to maintaining adequate rates for the program, Pinnacle has also been retained to perform the annual analysis of unpaid loss and expense reserves. The CIC’s annual reserve analysis includes a review of policies written, premium collected and claims incurred by the CIC at the close of each fiscal reporting period. Management relies on Pinnacle’s analyses to ensure the financial health of this strategic venture.

Self Insured Loss Reserve Analysis
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Self Insured Loss Reserve Analysis

Pinnacle was approached by a major, national manufacturer to perform a loss reserve analysis of their retained workers compensation, auto liability, general liability and products liability loss exposures. The previous actuary worked for a large broker which the customer felt presented a conflict of interest. In addition, the actuary used industry benchmarks that the customer felt did not accurately represent their loss development behavior. Pinnacle worked with the customer to better understand their loss exposures, claims handling practices, and corporate risk management philosophy. We worked with the company to gather better internal data and refine the industry benchmarks to better reflect their third party administrator, industry focus and geographic mix. These refinements, and many others, led to a more accurate analysis of the company’s retained loss exposures, a reduced provision for unpaid claims on their balance sheet, and reduced collateral requirements from their fronting carrier.

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