Is the risk suitable to retain?
Look at loss history, volatility, safety practices, cash flow, and appetite for long-term participation. A feasibility study should test downside scenarios as well as expected outcomes.
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03 / 03 · Captive & alternative risk
A captive should earn its complexity.
Doug helps organizations evaluate whether owning more of their risk can support their long-term goals, and which structure merits a closer feasibility review.
Questions worth asking
Where to look first.
Which structure fits?
Single-parent, cell, group, large-deductible, and retrospective structures offer different degrees of ownership, control, and obligation. Property, general liability, auto, and workers’ compensation may be considered, depending on the structure and jurisdiction. The decision follows the economics and governance capacity.
What changes after launch?
Claims oversight, collateral, actuarial work, management, and regulatory coordination become part of the operating plan. Those responsibilities should be explicit before committing.
How Doug approaches it
From exposure to decision.
The first review is about the business and the tradeoffs. Any recommendation depends on the full facts, the available market, and the applicable policy terms.
- 01
Assess fit
Review loss experience, financial capacity, risk tolerance, and strategic goals.
- 02
Model scenarios
Use actuarial and financial analysis to compare expected and adverse outcomes with traditional coverage.
- 03
Set governance
If the structure fits, define claims, capital, management, regulatory, and review responsibilities.
Practice scope
Topics the review may cover.
Coverage and service availability depend on the business, project, and insurer terms.
- Single-parent captives and segregated-cell structures
- Group member-owned captive programs
- Property, general liability, commercial auto, and workers’ compensation risk in suitable captive structures
- Large-deductible and retrospective programs
- Actuarial feasibility and pro forma studies
- Program governance, captive management, and regulatory coordination
- Claims control, financial transparency, and potential underwriting-profit or dividend participation
A practical first conversation
What to bring.
You do not need a complete submission to start. These details help Doug find the important questions faster.
- Current premium and coverage structure
- Several years of loss and exposure data, if available
- Financial and collateral constraints
- What greater control should accomplish for the business