Upon completion of the initial feasibility analysis and engagement to proceed further, the Oxford Risk Management team will work with you to perform a more in-depth review of your unique fact pattern to determine risks appropriate for your company. Our compliance team will conduct a review of your existing policies to identify gaps in coverage and uncover additional lines of coverage which may provide meaningful benefits to your operating company.
A captive insurance company can provide protection against risks that prove to be too costly in commercial markets or may be generally unavailable. It may also be utilized to address the inability to obtain specialized types of coverage from commercial third-party insurers. For example, your company may be subject to economic loss due to governmental regulatory or legislative changes. While it would make a lot of sense for you to purchase coverage for protection from these risks, you may find that this type of policy is simply unavailable. Your captive insurance company is better equipped to offer specialized coverage, tailored specifically to your unique business needs.
It is important to understand that while a captive can be utilized to replace your existing insurance coverage, this may not always be the case. Coverage issued by the captive such as deductible reimbursement doesn’t have to take the place of existing coverage, especially when your current policies provide coverage against the types of risks which may result in catastrophic losses. Your captive can help you build a policy engineered to supplement these traditional lines of coverage you already enjoy. In most cases, to the extent existing property and casualty coverage is reasonably priced, the most attractive option may be to retain existing policies for your traditional coverage, supplementing it by addressing self-insured risks with your own captive insurance company. Therefore policy features, coverage and limits can be drafted to meet your specific enterprise exposures.
The Risk Management process will often be complex, and it is not unusual for the client to call upon the services of an independent risk management consulting firm to help quantify the total cost of risk for their organization. Oxford and your independent risk management analysts will work together to assure a thorough and comprehensive analysis of your complete property and casualty coverage.
The Oxford team will work with our actuarial partners to obtain and establish appropriate, independent pricing for the risks which have been identified. They will complete a study which will address overall cost, optimum retention levels, and capital and surplus requirements. It is crucial that the insurance policies issued by, or reinsured by, your captive insurance company provide bona fide coverage at reasonable prices. The policies issued by your captive company must pass the smell test to be respected as insurance in the traditional sense. With that in mind, we engage industry-leading, respected and credentialed actuarial firms to develop realistic premium rates for the coverage you select. Our lead actuarial partners work with clients nationwide to support the establishment, implementation and management of successful risk management programs to fit their individual needs. They are credentialed and have many years of combined experience in providing actuarial services to individual companies, governmental entities and insurance Department regulators. They also provide analysis and advice to state insurance Department regulators, assist in market conduct examinations and provide expert witness testimony for litigation and arbitration cases. Once the captive is operational, the actuarial consultant will act as your appointed actuary, assisting in the establishment of adequate insurance reserves. Oxford will coordinate with your team of service providers and will assist with program formation, implementation, confirming renewal pricing for your policies, and assisting in the management of your captive insurance company.