Ventiv Technology

THE CAPTIVE INSURANCE COMPANY'S GUIDE 8 CHAPTER 4: WHO BENEFITS MOST? A key premise of this eBook is that, given the current and emerging requirements for regulatory and governance reporting, every captive has a need for structured, auditable and reliable data. Captives already have financial/accounting systems in place, whether insourced or outsourced. For some, this is sufficient to manage their technical underwriting entries in an ad-hoc manner, so increased technology usage needs to be evaluated on an individual basis. This chapter considers the characteristics and types of captives that would most benefit from deploying technology for the purpose of improving data management. A good place to start is by matching your captive's characteristics to the list that follows. In our experience, we've found that captives who exhibit most or all of the following traits are good candidates to assess whether or not they will benefit from the increased use of technology. AFFECTED BY GROWING VOLUMES OF DATA For many captives, managing higher volumes of data, whether related to risk, policies, or claims, is a key driver to adopting technology. In some cases it makes sense to consider technology where there are groups of captives, whether part of a risk retention group, a group of cell captives or indeed captives under a single manager. That said, most cell captives are structured in a simple way and controlled by their parent, so they normally require no specialized technology. PROGRAM COMPLEXITY Program complexity with multiple participant insurers and reinsurance or retrocession arrangements is often another key driver to adopting specialized technology; this is especially applicable in managing the allocation of claim financials through the program to each party, plus handling the incoming and outgoing premiums as well. And last but not least, today more than ever it is important to have a firm grasp on the notification and recovery of claims from commercial reinsurers. WORKING LAYERS IN PLAY Especially on the claims side, a factor in using technology is whether the captive is involved in working layers with high-frequency claims. If, however, the captive is only involved in catastrophe layers that will rarely be touched, there is little value in handling this via a formal technology solution.

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