Finance, Accounting, and Investments

  Financial Statements-SF

Accounting Rules Impact Captives Writing High Deductible Workers Comp Policies

Johnson Lambert recently released a new white paper on the revisions to Statement of Statutory Accounting Principles (SSAP) No. 65 regarding high deductible workers compensation policies. Any captive insurers using this type of policy need to be aware of the changes and their impact.
September 20, 2017 Read More
  Accounts Filing Forms-SF

PCAOB Adopts New Standards on Unqualified Audit Opinion Disclosures

Why should captive insurers care about new accounting opinion disclosure standards for public companies? The reason is that they bring the United States into closer alignment with international accounting standards and are likely to become "best practices," even for nonpublic companies.
August 28, 2017 Read More
  Passive versus Active 600x300

The Case for Passive "ETF" Investing Grows Stronger for Captives

For captives, especially smaller captives or group captives, passive investing can help reduce frictional investment expenses in a low yield, total return environment. A recent S&P webinar and "Wall Street Journal" article strengthen the argument for passive investing, thereby reinforcing a case for captives' use of passive investing.
June 28, 2017 Read More
  Stability 600x300

Risk Retention Groups Remain Financially Stable Despite Mixed Reported Results

A review of the reported financial results of risk retention groups reveals insurers that continue to collectively provide specialized coverage to their insureds while remaining financially stable, according to the latest Demotech report on the sector. While risk retention groups have reported net income, they have also continued to maintain adequate loss reserves while increasing premium written year over year.
May 26, 2017 Read More
  Kroll Bond Rating Agency-SF

KBRA Announces New Captive Rating Service

The market for captive ratings just expanded with the announcement from Kroll Bond Rating Agency (KBRA) about its new rating option. We interviewed KBRA's insurance specialists at the KBRA home office in New York, and our Q-and-A examines this new option and how it differs from the model-driven philosophy of other credit rating agencies.
May 08, 2017 Read More
  Passive versus Active 600x300

Is Active Investment Management Facing Extinction?

Today’s financial news headlines are filled with stories about the rise of passive investing as investors abandon active managers. Those who own captive insurers or who oversee management of their portfolios should understand the active versus passive management debate and why active investment management, at least for fixed income portfolios, often makes sense. Active management needs to evolve, but it will survive.
April 04, 2017 Read More
  Financial Statements-SF

Loss Disclosures for Short-Duration Insurance Contracts (GAAP Filers)

The Financial Accounting Standards Board has issued ASU 2015–09 for nonpublic, calendar year-end insurance company filers. This Accounting Standards Update requires additional disclosures to provide better insight into an insurer's initial claim estimates and subsequent adjustments and to help financial statements users understand the frequency, severity, and timing of future cash flows related to the estimated claim costs. This article summarizes the new requirements.
March 22, 2017 Read More
  Machine Learning-SF

Uncertain Times Squared: The Future of Investing for Insurers

What new ideas, technologies, and ways of conducting our lives do we see impacting our economy and financial markets? The future of investing for insurers, in the next 7–10 years, will see artificial intelligence and especially machine learning having a very pronounced impact on our careers, companies, and daily life.
March 06, 2017 Read More
  Expand Captive Horizon

Captive Insurance Industry Looks at What Is Next for Bond Yields, Inflation

One of this editor's favorite songs is Elton John's "Where to Now St. Peter?" from the 1970 album "Tumbleweed Connection." It seems extremely apropos to the bond market after the recent election results.
November 23, 2016 Read More
  Question Mark

Captive Insurers Need To Ask Investment Managers More Meaningful Questions

Alton Cogert, president and chief executive officer of Strategic Asset Alliance, recently posted a blog on the Strategic Asset Alliance website offering the four specific questions that will lead to a more meaningful and useful investment manager meeting.
November 09, 2016 Read More
  Dollar Sheet

Captive Insurers Need To Understand New Money Market Rules

The U.S. Securities and Exchange Commission (SEC) recently instituted new regulations governing institutional money market accounts. The historical context for this change dates back to the financial crisis of 2007–2008.
October 05, 2016 Read More
  Business Man Thinking

Ponder Your Captive Insurance Company's Investment Portfolio

While captive owners and managers pay particular attention to the liability side of the balance sheet (i.e., claims reserves), recent news articles got us thinking about the asset side as well.
August 26, 2016 Read More
  ComparingPerformance

Comparing the Performance of Your Investment Manager

How does one know whether his or her portfolio has been performing well compared to those of other investment managers? Alton Cogert, president and chief executive officer of Strategic Asset Alliance, recently posted a blog on the Strategic Asset Alliance website discussing the use of statistics to gauge the past risk adjusted performance of a portfolio versus its future performance.
July 22, 2016 Read More
  Board Meeting FN

Captive Insurance Boards Can Benefit from NAIC Capital Markets Special Reports

Since investment portfolios comprise one of the largest assets on the balance sheet of any captive, it is an area that deserves special attention at any captive board meeting.
February 24, 2016 Read More
  Survey Results-Mixed

2014 Captive Investment Indices Report Shows Impact of Equities

London & Capital has reported the results of its suite of proprietary indices for 2014. The indices reflect three model asset allocations that London & Capital designed to fit the investment needs of three liability profiles of captives. Each of the indices has differing allocations of U.S. high grade bonds, high yield bonds, equities, and cash.
January 23, 2015 Read More
  Global Economy Dollars

Insurance and Financial Services Sectors Inextricably Linked, Forum Shows

The insurance sector did not cause the 2007-2008 economic crisis, regulators agreed, but it was pointed out to participants in the recent ICMIF Regulatory Issues Leaders Forum that the global financial crisis did demonstrate how inextricably linked the insurance sector is to the financial services sector as a whole.
October 23, 2014 Read More
  captiveindices

Captive Industry Investment Performance Indexes Published

London & Capital has developed three indexes for captives to benchmark their investment performance. The proprietary indexes are based on three typical asset allocations across a 10-year cycle and will be published by London & Capital every quarter and followed up with an annual in-depth analysis.
August 29, 2014 Read More
  captive-investment-portfolio-fig2

More Captives Choose Intercompany Investments

Andrew Wang, Runnymeade Capital Management, has analyzed the investment portfolios for captive insurers based on the Marsh 2014 captive benchmarking report, according to RTT News United States.
August 07, 2014 Read More