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R L Captive Solutions

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Underwriting Profit Insurance ... Facts Work Comp Premiums up 50% in the last three years 10 to 30% of Work Comp Claims in the Commercial Market Place are ... – PowerPoint PPT presentation

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Title: R L Captive Solutions


1
R L Captive Solutions
  • Cost Control Presentation
  • by
  • Travis Lantis

R L Consulting, LLC.
2
What is a Rent-a-Captive?
  • Where a sponsor (Captive Insurance Company) will
    rent its license capacity for a fee to other
    alternative risk participants
  • One of the leading insurance alternatives today
  • Can be used as part of an overall risk management
    strategy to help reduce the cost of commercial
    insurance by avoiding administrative overhead and
    capturing underwriting profits and investment
    income
  • R L Consulting, LLC.

3
What are the Benefits?
  • Long term control of insurance cost
  • Controlling the claims process
  • Direct access to reinsurance markets
  • Better tailor your risk management needs
  • R L Consulting, LLC.

4
Your Partners
Your Partners
  • R L Consulting
  • KPMG International
  • Sitnal Insurance
  • International Advisory Services (IAS)
  • Gallagher Bassett
  • Sparta Insurence
  • R L Consulting, Inc.

5
KPMG International
  • Global Leader in Audits and Accounting
  • Audit 4.72 billion
  • Tax (Legal) 3.31 billion
  • Advisory Services 2.96 billion
  • Total 12.16 billion
  • Up 13.4 from 2002-2003
  • R L Consulting, LLC.

6
IAS International Advisory services
LTD .
  • IAS Was Formed in 1981
  • Over 180 Insurance Companies Under Management
  • Over 4 billion in annual written premium
  • Over 7 billion in invested assets
  • The Worlds Largest Independent Insurance
    Management Company


  • R L Consulting, LLC.

7
Fronting Reinsurance
  • Sparta Insurance
  • Unbundled Alternative Risk Transfer
  • A- (Excellent) rating from A.M. Best
  • Fronting
  • Reinsurance
  • Underwriting
  • Expertise
  • Technology Platform
  • R L Consulting, LLC.

8
Other Partners
  • Who
  • Consultant Broker
  • Fronting Carrier
  • Third Party Administrator
  • Reinsurance Partners
  • Captive Managing Firm
  • CPA Actuarial Firm
  • Outside Legal Firms
  • Bank Investment Firm
  • What
  • Experience and Resources Required
  • Provides Certificate of Insurance
  • Claims Management
  • To Take Excess Risk
  • Day to Day Accounting Regulatory Compliance
  • Audits
  • Captive Domicile Corporate Document
  • Banking and Investments
  • R L Consulting, LLC.

9
Importance of our Captive Insurance
  • Premium Stability
  • Greater Flexibility Risk Management Control
  • Completely Funded Program
  • Built in Risk Management Programs
  • Priorities at work
  • R L Consulting, LLC.

10
Disadvantages
  • Capital Requirements to assume deductible
    responsibilities
  • Obligation of claims management
  • R L Consulting, LLC.

11
Underwriting Profit
Insurance Premium
15 Profit
55 Expected Losses
40 Actual Losses
40 Expenses
40 Expenses
5 Taxes
5 Taxes
Conventional Insurance
Insurance Profit Center
  • R L Consulting, LLC.

12
Facts
  • Work Comp
  • Premiums up 50 in the last three years
  • 10 to 30 of Work Comp Claims in the Commercial
    Market Place are Fraudulent
  • Risk Management
  • Liability
  • 2003 233 Billion Industry Wide was spent on
    Claims Lawsuits
  • Up 27.4 Billion from 2002
  • Risk Management
  • A good risk management program will reduce the
    above affect

Provided by Tillinghast Accounting Actuarial
Firm
  • R L Consulting, LLC.

13
Lines of Coverage
  • General Liability
  • Workers Compensation
  • Directors and Officers
  • Professional Liability
  • R L Consulting, LLC.

14
Learn This Lesson
  • Nothing is a sure thing
  • Segregated Cells A Must
  • Do not jump from carrier to carrier
  • Stay on top of your loss control
  • Risk Management is Key
  • We will provide a comprehensive RISK MANAGEMENT
    program for you.
  • R L Consulting, LLC.

15
Premium WC
Liability - Case Study
  • Loss reserve fund 2,320,000
  • Capital 580,000
  • Expenses 2.1 million
  • Total funding 5.0 million
  • Large Ded. 100,000 per claim
  • Aggregate 2.9 million
  • R L Consulting, LLC.

16
Results WC
Results Liability Study
  • Claims Paid - 880,000
  • Loss Reserve - 672,000
  • IBNR Reserve - 448,000
  • Reinsurance - 750,000
  • Fronting Co. - 900,000
  • Expenses - 1,150,000
  • Total - 4,800,000
  • Underwriting Profits 200,000
  • R L Consulting, LLC.

17
Long Term Care WC Study
Long Term Care WC Study
  • 2000 Mod rate 1.36
  • 12,000,000 Payroll
  • 1,020,000 Premium
  • 367,200 Mod Calculation
  • 1,387,200 Including Mod
  • R L Consulting, LLC.

18
Long Term Care WC Study
Long Term Care WC Study
  • 2005 Mod rate .69
  • Implementation of our Risk Mgmt. program
  • 14,000,000 Payroll
  • 1,190,000 Premium
  • -368,900 Mod
  • 821,100 With Mod Calculation
  • R L Consulting, LLC.

19
Dividends
Underwriting Profits
  • The first date a possible disbursement will be
    considered is 36 months after each policy
    effective date
  • Based on underwriting and loss reserves
  • Disbursements are subject to board approval
  • One disbursement per year will be considered
  • Option to reinvest to lower premiums
  • R L Consulting, LLC.

20
End of the Day
  • Identify your opportunities, assess the risks and
    qualify the return
  • Make sure your loss control is in place
  • Have a good idea as to the function and probable
    structure
  • Find and employ excellent partners
  • Manage the big picture while understanding the
    details.
  • Have fun
  • R L Consulting, LLC.

21
R L Consulting Team
  • We bring a host of personnel to the table to
    make this a one stop shopping for your insurance
    solution. The professionals we are partnered
    with bring a wealth of experience to you and are
    entrenched in the captive marketplace. Let
    ReRide be the solution for you!
  • R L Consulting, LLC.

22
The Next Step
  • Complete a Comprehensive analysis to determine if
    you qualify for this Risk Management Strategy?
  • We will Require
  • 5 years loss runs (valued within 3 months of
    policy inception)
  • Audited Financial Statements last 2 years
  • Details of Large Claims over 25,000
  • Historical and prospective exposure
    information
  • Risk Management Program Information
  • Should you qualify-more information will be
    required at that time
  • R L Consulting, LLC.
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