Providing data to actuaries and
commercial carriers
Another challenge is giving actuaries the data they
need to calculate capital requirements, claims
reserves, and premium allocations. In order to
make these calculations, actuaries are being more
forceful in their demands for a higher level of scope
and detail, auditability, and reliability. When captives
go to market, commercial carriers demand
extensive data for competitive pricing.
Growing risk-management requirements
More than ever, regulators are expecting captives to
be run like commercial insurance carriers, which
includes having proper risk management policies in
place as well as fit and proper people in key
positions such as risk management, finance and
audit. Furthermore, proper documentation is
expected. Access to accurate, comprehensive data
is a prerequisite to activities such as:
• Managing counter-party exposure;
• Meeting strict reinsurance policy and
claim notification time limits;
• Monitoring aggregates and claim positions; and
• Managing of premium cash flows between
corporate, captive, commercial insurers,
reinsurers and business units.
Meeting strategic goals and parent expectations
Businesses today demand efficiency and
cost-effectiveness as a matter of course. It is
important for a captive to be well positioned to
demonstrate its value to the parent company
through, for example, effective cash-flow
management, alignment of corporate and business
unit risk appetite, and bringing in additional
programs for coverage.
THE CAPTIVE INSURANCE RENAISSANCE | 4
