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)

Publications and Media

May 14 2020 APEX
Actuarial 101 for Self-Insured Entities
Authored by Ken J. Hawkins.

April 2018 APEX Webinar
Actuarial 101 for Self-Insured Entities
Authored by Nicholas E. Alicea.

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Case Studies

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.

Self Insured Dividend / Assessment Analysis
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Self Insured Dividend / Assessment Analysis

A large group self insurance program was concerned with the amount of retained earnings and wanted to establish a policy for the minimum capital for the program to trigger dividend distributions. Pinnacle compared the program’s capitalization to a wide variety of industry standards for similar programs from rating agencies, regulators, and other sources. The results of this analysis lead to a recommended board policy regarding a minimum capital threshold for dividend distributions and ultimately to the development of an actuarially sound dividend distribution plan.

Staffing Self Insured Reserve Analysis
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Staffing Self Insured Reserve Analysis

Pinnacle was retained by a group of staffing companies with large self-insured retentions for their workers compensation loss exposures to perform quarterly loss reserve analyses and annual funding studies. Pinnacle initially used customized benchmarks for the staffing as the basis for our analyses. However, it became apparent that the benchmarks were not reflective of the unique characteristics of this program. Pinnacle worked with the third party administrator (TPA) for the program to gather additional historical experience for the program, as well as consolidated experience for several similar programs administered by the TPA. Using the results of our analysis of the TPA’s previous experience for this program and others like it, we were able to develop benchmark loss development assumptions that tracked much more closely with the program’s actual loss emergence.

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