When Premiums Rise but Loss History Is Excellent, It’s Time to Reduce Dependency on Insurance Market.

The Challenge

The client, a civil construction contractor and supplies distributor, was facing annual increases in premium costs while maintaining very low or no loss experience on both their property and casualty and benefits programs. Given their industry and potential exposures, the traditional market was unwilling to provide premium relief without substantial corporate retentions.

Even though the company had a strong risk tolerance level, there was a desire to implement formal risk financing strategies to ensure proper accrual for future losses and improve the overall performance of their risk management portfolio.

The Solution

Hylant analyzed a single parent captive structure for the client that would allow them to quantify the loss costs associated with taking increased corporate deductibles across various lines of coverage, including:

• General liability
• Auto liability & physical damage
• Workers compensation
• Excess medical stop loss

The Global Captive Solutions team, in concert with a credentialed third-party actuary, were engaged to analyze various attachment points for each coverage in order to qualify and quantify the potential costs and benefits that could be seen by funding for losses with a captive insurance company.