Feasibility Studies Critical When Considering Employee Benefit Programs in a Captive

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 previous data regarding claims and payments and an actuarial analysis of that underwriting review. Companies having 5,000 employees, $3 million in premium, and an established US-based captive are more likely to succeed with putting their benefits programs into captive insurance arrangements, but even these criteria may not be enough to justify the arrangement for all coverages in all lines, if any.