Alternative Risk Finance Programs
Bartlett Actuarial Group assists clients in establishing programs in the alternative risk finance market to cover property and casualty risks. Innovative solutions from the alternative risk transfer market have proven useful in providing organizations additional tools by which to manage their exposures. Growth in the alternative sector has been driven primarily by efficiencies and cost savings that allow companies to boost enterprise value and address issues of affordability and availability of protection against risk of loss. Several vehicles can be utilized when establishing an alternative risk finance program including Captives, Risk Retention Groups or other types of self-insurance programs.
What is a Captive?
A captive insurance company (‘captive’) is, in its simplest form, a wholly owned insurance subsidiary of an organization/company (parent) that insures all or part of the risks of its parent. Captives are often formed by companies when business insurance for a certain commercial risk is either unavailable or unaffordable through traditional insurance markets.
What is a Risk Retention Group?
A Risk Retention Group (RRG) is an alternative risk transfer mechanism that is owned by its members and spreads risk and financial results among members. The federal government passed the Liability Risk Retention Act in 1986 which allowed Risk Retention groups to be licensed in one state but to operate in every state. RRGs only insure third party liability coverages.
How can Bartlett Assist Your Company?
Bartlett Actuarial Group (‘Bartlett’) provides consulting services to assist our clients in establishing alternate risk transfer vehicles. Bartlett will complete a study which will address overall costs, optimum retention levels, and capital and surplus requirements. If Bartlett is your first stop, we can gladly recommend a team of service providers who will assist you with program formation, implementation and management of your Captive Insurance Company.
Once the captive is operational, Bartlett will act as your appointed actuary, assisting in the establishment of adequate insurance reserves.
Is your firm currently paying over $500,000 for your property and casualty insurance? If so, you may be a good candidate to insure these costs through a captive insurance program. For more information, please contact us at 843-377-0993.