The Property and Casualty Insurance Captive Innovator Profile
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Transcript of The Property and Casualty Insurance Captive Innovator Profile
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Making a difference for human services
In Partnership with TD Insurance, Inc.
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The Benefits:
1. Managing Risk
2. Financial Efficiency
3. Supporting Mission
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MEMBER ORGANIZATIONSThe Captive Advantage LLC
As of July 1, 2011
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Severe economic times with funding cuts and tighter
margins
Substantial property & casualty and workers
compensation costs
Increasingly more difficult client population posing
greater risk Limited organizational expertise on insurance and risk
management.
SOCIALINNOVATIONS/SOCIALENTERPRISESThe Insurance Quandary for Human Service Organizations
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The Solution To Reduce Insurance Costs
To Reduce Organizational Risk
The Answer
Captive Insurance (TCA)
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2009 Captive Results
North American Family Institute (NAFI) had realized a significant
premium savings while participating in its first year of the P&C captive
program in 2009. It is our expectation that NAFI will continue to see
significant premium savings. NAFIs 2009 premium savings are as
follows:
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2010 Captive Results
The Board of Managers of The Captive Advantage (TCA) was pleased to announce that as of
December 31, 2010, the FY2010 premium savings to member participants was 44% of Captive
Eligible Premiums* for the 2010 Calendar Year.
"This percentage represents important and large savings that is available to other Human & Social
Services organizations who qualify to join our group.
TCAs 2010 premium savings which represent approximately $450,000 are as follows:
* Coverage includes: General Liability, Professional Liability, Abuse & Molestation, and Automobile.
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Development of
The Captive Advantage, LLC
2007 Development ofbusiness modelSearch for insurance companypartners & related insurance
partners
Begin development of web-based claims reporting
system
2008Agreements
reached with keypartners
CedarConsulting
Citadel RePhiladelphia
Insurance
2009Property & Casualty Captive
opens withNAFIparticipation
Web-based claims reportingsystem implementation
Formal Marketing programbegins
2010New CaptiveParticipants
Key
Program,Inc.
Bay Cove
HumanServices
Justice
ResourceInstitute
New Board
ofManagersConvene
2011Finance Committee
& MarketingCommittee
Convene
New CaptiveParticipants
You Inc.Spectrum Health
Systems
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Industries Using Captive Solutions
Examples Healthcare
Municipalities
Higher Education
Manufacturers
Transportation
What have they done?
Sought out and developed
alternative risk financing options
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What Is A Captive?
Lines of Coverage can include:General Liability
Professional Liability
Abuse & Molestation
Automobile
A Captive is an insurance company that exists primarily, but not exclusively, to
underwrite the risk of its owners
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How A CaptiveWorks for You Vs.
Standard Insurance
Standard Insurance
INVESTMENT
INCOME
THE INSURED
INSURANCE
CARRIER
Insurance PremiumInsurance Policy& 1st Party
Claims Payment
Claims
Payments
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How A CaptiveWorks for You Vs.
Standard Insurance (Contd)
Captive Insurance
INVESTMENT
INCOME
Note: For ease of illustration, Reinsurance Transactions have been omitted from both schematics.
THE INSURED
The Paper
FRONTING COMPANY
(Pays Claims)
Policy
Premium
THE CAPTIVE
ADVANTAGE
Dividends or Lower Premiums
Captive
Premiums
Ceded
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Reasons to Consider A Captive
Alternative to trading dollars with P&C insurers
Coverage tailored to specific needs
Greater control over claims and loss control
Accumulation of investment income---reduces net costs
Incentive for Risk Management activities---further reducing net cost
The Cs:
Cost
Coverage
Control
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Why Take AGroup Approach?
Increased buying power means lower costs
Economies of Scale
Fixed Costs spread over a large group lowers costs
Ability to share risks means lower risk to an insurer,
which means lower costs to individual participants
A group can create the capacity to insure risks the
commercial insurance market wont
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Our Partners
Rent-A-Captive Facility:Citadel Re Bermuda
Fronting Carrier
Philadelphia Casualty Lines
Third Party Administrator
Broadspire Workers Compensation
Captive ManagerCedar Consulting
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Risk Management Services
F
or all participants in The Captive Advantage, LLC program, the LLC willprovide the following risk management services:
Identification and assessment of exposures to loss
Review of internal policies/documents as they relate to risk management
Development of training materials to improve risk and safety awareness
Augment risk management communication
Participant-focused claim procedures designed to ensure timely closure
Litigation management assistance as it pertains to claims settling
Periodic reporting quantifying participant loss control
Participant training provided for the LLC on-line claims reporting system
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Here are some important factors to keep in mind when evaluating The
CaptiveAdvantage , LLC:
This is an Insurance Captive created exclusively for Human & Social Services organizations and this
program has the potential to significantly reduce your costs for property and casualty insurance.
Only known Captive in the United States for the H & SS industry.
Here is some information about our progress in developing this innovative and cost savingprogram.
The Key Program, Bay Cove Human Services, Justice Resource Institute, YOU Inc., Spectrum Health
Systems Inc., have joined North American Family Institute in The Captive Advantage. Many leading
human service organizations are considering participation.
The TCA program has been evaluated by members of the legal community as well as reputable
auditors and insurance consultants and recommend to their clients.
North American Family Institute saved over $200,000 in insurance costs in FY2009 and captive
members saved over $450,000 in insurance costs for FY2010.
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Here is a free tool which could assist you in evaluating The CaptiveAdvantage , LLC:
TCA is continually looking to add members who would benefit from such a program. TD Insurance currently provides
Human Service Agencies interested in evaluating the TCA program with a tool that we refer to as the Rear View Mirror
analysis. This process will allow you to view a Pro-Forma of your insurance program should you had been a participant
in this group captive from approximately five years or as far back as your provided loss run record to present. We feel
that this is a beneficial tool for organizations that are examining this group captive solution at no cost to your agency.We are confident that if afforded the ability to perform this analysis, you will find the opportunities that this program
presents to its members worthy of further discussions.
To Conduct this Rear View Mirror Analysis, we would simply need the following information:
Package Policy
5 Years ofPremium - Broken down by Line of Coverage
i.e. Property, Inland Marine, Crime, General Liability, Professional Liability, Abuse & Molestation, and Automobile
5 Years ofLoss Runs If you are currently with Philadelphia Insurance, we need the Underwriting Detail Report -
you can request this from your insurance broker.
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BOARD OF MANAGERSThe Captive Advantage LLC
As of July 1. 2011
Paula Aiello - Y.O.U. Inc.
Dr. Yitzhak Bakal - North American Family Institute Kerry Horgos - Bay Cove Human Services
William Lyttle - Key Programs
Janet Langlois - Spectrum Health Systems
Mark Schueppert - Justice Resource Institute
Robert Vermes - The Captive Advantage LLC
Dan Nakamoto - North American Family Institute
Roger Marcorelle - Banking Executive