A feasibility study will enable you determine if establishing a captive is right for your company. At Comerica, we can gather a team of leading professionals to complete the feasibility study and design a captive insurance program specific to your company's needs. The calculations will include the type and amount of start up capital, the expected level of losses, the expected level of expenses including reinsurance costs, and investment income.
Consider the following regarding your captive:
The objective of the captive
Provide insurance which is currently unavailable and/or unacceptably priced, etc?
Do you want to reduce costs?
Your company's risk retention levels
To determine if they are appropriate given the company's loss history, and if reinsurance can be purchased at attractive rates above such levels. The levels you assume should be realistic with respect to the capital and surplus of your captive insurance program.
Loss projections
The actuaries will review your company's past and anticipated loss experience. They should always include at least one heavy loss case to determine the effect that it would have on your insurance expenses. Risk management and loss prevention controls need to be established for your entire corporate family, including all affiliates and subsidiaries.
Risk selection
Your willingness and ability to assume higher risk retention levels will lower your reinsurance costs and vice versa. Select the risks you want to retain in your captive. The less risky and more profitable part of your insurance program can be retained while other risks can be covered in the reinsurance market.
Your team of professionals. Comerica Bank can be a significant part of your team. We can also provide referrals to the world's leading professionals in insurance, captive management, consulting, auditing and legal firms to help you establish and manage your captive insurance company.
