Ken J. Hawkins
Timothy C. Mosler
Jordan R. Paszek
Derek W. Freihaut
Travis G. Murnan
Darcie R. Truttmann
Aaron N. Hillebrandt
Erich A. Brandt
Laura A. Maxwell
Robert J. Walling III
Gregory W. Fears, Jr.
Arthur R. Randolph II
Joseph A. Herbers
The actuarial team effectively communicates their findings in a way which is easy for a layperson to understand.
Pinnacle helps alternative market risk owners, captive managers and service providers determine risk retentions that optimize the balance between the cost of risk transfer and loss volatility.
Pinnacle consultants deal with auditors daily, assisting them in serving their customers and evaluating the work products of other actuaries.
Pinnacle provides loss reserve analyses and other
diagnostics in support of collateral negotiations associated with deductible
and/or self-insured retentions.
Pinnacle is experienced developing cost allocation mechanisms
by member or department in the most equitable manner using elements such as –
exposure, geographic cost differences and actual loss experience.
Management sometimes wishes to reflect the time value of money in funding projections, accruals for unpaid claims liabilities and other valuations. The two most important parameters for doing so are the assumed interest rate and the underlying claim payment pattern. Assessing reasonable values for these parameters is not trivial as the interest rate may need an adjustment for risk while the claim payment pattern may not be readily available.
Whether it’s a captive insurance company, large deductible program, self-insured entity, public entity pool or syndicate, an alternative market entity is a risk retention program outside the traditional commercial property and casualty market. By virtue of the growth in the alternative markets for more than 30 years, the premium volume outside the mainstream markets is now greater than that written by the traditional markets.
Pinnacle understands the needs of those involved in the alternative markets, the most important of which is a desire to control insurance costs over the long term. Each program has unique risk characteristics that are often the impetus for the program formation in the first place. Differing geographic, industry or line of business mixes of business may dictate customized approaches to reviewing the risk profile for your program.
Pinnacle has expertise in a wide variety of lines of business, regulatory jurisdictions and industry niches. Not only do we have a team of experienced consultants at your service, we also have the local knowledge unique to individual market segments such as:
February 2021 APEX Webinar
Selecting Predictors in a Multi-Dimensional World
Authored by Gaétan R. Veilleux.
What's an innovative actuary to do?
Captive Review - Cayman Report
Authored by Robert J. Walling III.
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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.
Captive Feasibility Study
When a regional physicians group, with a moderate deductible program realized they were not getting due credit for more than a decade of exceptional loss experience, they decided to explore other options.
They chose Pinnacle specifically due to our expertise in captive and self-insurance programs.
Initially, Pinnacle discussed options including segregated cell captives, single parent captives, and even risk retention groups once they began to consider marketing the program to other similar regional physician groups.
While the customer was considering the structural alternatives, Pinnacle pursued a funding analysis. Credibility weighting the customer’s experience with industry benchmark data, produced estimates of expected losses and loss variability in several different loss layers. This not only showed the additional risk associated with higher limits of self-insurance, but was also tremendously valuable in negotiations with fronting carriers and reinsurers.
The client decided to increase the deductible on the coverage provided by their insurer, which offered more responsive pricing due to Pinnacle’s funding analysis and to form an off-shore captive providing deductible buyback coverage. The comfort level our client had with the insured’s services also influenced the decision.
Pinnacle also worked with the captive manager to develop the feasibility study and pro forma financial statements that become the foundation of the captive application. The application was approved as submitted and the captive is running quite successfully.
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.
At Pinnacle, we partner with you to explore whatever path it takes to find the answers you need.
April 15, 2021
April APEX Webinar -
Warranties, Guarantees and Actuaries: Adding Value with a Captive