Self Insureds

Pinnacle did an excellent job, both crafting the report, and presenting the material. We welcome the opportunity to work with them again, and recommend them to others without reservation.

— National Healthcare Association

Services

Self Insureds

Self-insurance programs, which allow companies to pay some portion of their insurable loss exposures, come in all shapes, sizes and types. Multinational corporations, single state operations, large deductible and retrospectively rated policies, risk retention groups (RRGs), and captives — including 831(b)s, single parent captives, segregated cells, and group captives — all play critical roles.

As nationally-respected experts in alternative markets, Pinnacle provides a full range of actuarial services to a wide variety of self-insureds, including traditional loss reserve analysis for exposure within deductibles or self-insured retentions. We can compare alternate program structures, analyze retention levels and develop feasibility study documents, along with a wide range of other services.

Our expertise comes from having a team of experienced consultants with deep understanding of the challenges self insureds face, but also with the local knowledge unique to individual market segments, such as:

  • General liability for contractors 
  • Medical professional liability for physician groups and hospitals 
  • Workers compensation for temporary staffing firms 
  • Law enforcement liability for public entity pools 
  • Commercial auto liability for trucking companies, bus companies and taxicabs

As well, we are well versed in the intricacies of mechanisms for alternative markets structures, including:

  • Large deductible policies 
  • Retrospectively rated policies 
  • Single parent captives 
  • 831(b) captives 
  • Group captives 
  • Agency captives 
  • Association captives 
  • MGA-controlled programs 
  • Risk retention groups (RRGs)

Case Studies

Bermuda SAO
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Bermuda SAO

Pinnacle provides the loss reserve analysis and statement of actuarial opinion to the Bermuda-domiciled captive of a major national long haul trucking company for over a decade. This reserve analysis examined the captive's coverages for excess automobile liability coverage, deductible reimbursement under a large deductible workers compensation policy and cargo liability and physical damage coverages. The analysis utilized both company loss development triangles and industry benchmarks. Once the reserve analysis was completed and discussed with the client, the statement of actuarial opinion was produced to comply with regulatory requirements. Our excellent working relationship with the captive’s auditors simplifies the work of both firms on behalf of the captive.

Funding Study
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Funding Study

Pinnacle was approached by an aircraft manufacturer to provide recommended funding for various aviation and liability coverages. Pinnacle’s initial steps included discussing coverages to be provided and what data was available to complete the funding study. The captive was a start-up with no loss information on which to determine appropriate funding levels. Pinnacle was able to determine that the National Transportation Safety Board (NTSB) had a database of aircraft incidents that recorded both the manufacturer and model of the aircraft involved in the incident. Since the manufacturer was able to provide the number of units produced, Pinnacle was able to determine the frequency and severity of the incidents and project ultimate funding levels. The captive is currently operational after receiving regulatory approval.

Retention Analysis
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Retention Analysis

Pinnacle was asked by a large self-insured regional transportation authority to assess the impact of increasing their self-insured retentions for both workers compensation and automobile liability. We developed a stochastic simulation analysis, based on the program’s historical claims experience and industry benchmarks, that examined not only the increase in expected losses but the program’s additional potential loss variability. Finally, we discussed with the customer the relationship between their current capital position, as well as the current reinsurance market, to ensure the retention they selected for their program was appropriate for them. The authority ultimately increased their retentions, put some of their excess capital to work, and realized substantial savings in their reinsurance costs.

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