Feasibility Studies Critical When Considering Employee Benefit Programs in a Captive


Employee Benefits In Captives | Debbie Liebeskind | Actuary, Health & Group Benefits | Towers Watson


Potential gains from putting employee benefits programs in a captive insurance company may be outweighed by practical concerns. In this video, Debbie Liebeskind of Towers Watson advises that feasibility studies should be undertaken to evaluate such a business decision, including conducting an underwriting review of prior claims and premium data and an actuarial analysis of the data that also considers fronting fees, taxes, capital requirements, and the like to understand the long-term viability of the financials for a captive transaction. A company with 5,000 employees, $3 million in premium, and an established US-based captive are more likely to succeed in putting its employee benefits program into captive insurance arrangements. Furthermore, once the data is examined, it may turn out that it only makes sense to put certain employee benefits coverages into a captive.