The Property and Casualty Insurance Captive Innovator Profile

8/9/2019 The Property and Casualty Insurance Captive Innovator Profile

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Making a difference for human services

In Partnership with TD Insurance, Inc.


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The Benefits:

1. Managing Risk

2. Financial Efficiency

3. Supporting Mission


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MEMBER ORGANIZATIONSThe Captive Advantage LLC

As of July 1, 2011


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Severe economic times with funding cuts and tighter

margins

Substantial property & casualty and workers

compensation costs

Increasingly more difficult client population posing

greater risk Limited organizational expertise on insurance and risk

management.

SOCIALINNOVATIONS/SOCIALENTERPRISESThe Insurance Quandary for Human Service Organizations


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The Solution To Reduce Insurance Costs

To Reduce Organizational Risk

The Answer

Captive Insurance (TCA)


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2009 Captive Results

North American Family Institute (NAFI) had realized a significant

premium savings while participating in its first year of the P&C captive

program in 2009. It is our expectation that NAFI will continue to see

significant premium savings. NAFIs 2009 premium savings are as

follows:


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2010 Captive Results

The Board of Managers of The Captive Advantage (TCA) was pleased to announce that as of

December 31, 2010, the FY2010 premium savings to member participants was 44% of Captive

Eligible Premiums* for the 2010 Calendar Year.

"This percentage represents important and large savings that is available to other Human & Social

Services organizations who qualify to join our group.

TCAs 2010 premium savings which represent approximately $450,000 are as follows:

* Coverage includes: General Liability, Professional Liability, Abuse & Molestation, and Automobile.


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Development of

The Captive Advantage, LLC

2007 Development ofbusiness modelSearch for insurance companypartners & related insurance

partners

Begin development of web-based claims reporting

system

2008Agreements

reached with keypartners

CedarConsulting

Citadel RePhiladelphia

Insurance

2009Property & Casualty Captive

opens withNAFIparticipation

Web-based claims reportingsystem implementation

Formal Marketing programbegins

2010New CaptiveParticipants

Key

Program,Inc.

Bay Cove

HumanServices

Justice

ResourceInstitute

New Board

ofManagersConvene

2011Finance Committee

& MarketingCommittee

Convene

New CaptiveParticipants

You Inc.Spectrum Health

Systems


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Industries Using Captive Solutions

Examples Healthcare

Municipalities

Higher Education

Manufacturers

Transportation

What have they done?

Sought out and developed

alternative risk financing options


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What Is A Captive?

Lines of Coverage can include:General Liability

Professional Liability

Abuse & Molestation

Automobile

A Captive is an insurance company that exists primarily, but not exclusively, to

underwrite the risk of its owners


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How A CaptiveWorks for You Vs.

Standard Insurance

Standard Insurance

INVESTMENT

INCOME

THE INSURED

INSURANCE

CARRIER

Insurance PremiumInsurance Policy& 1st Party

Claims Payment

Claims

Payments


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How A CaptiveWorks for You Vs.

Standard Insurance (Contd)

Captive Insurance

INVESTMENT

INCOME

Note: For ease of illustration, Reinsurance Transactions have been omitted from both schematics.

THE INSURED

The Paper

FRONTING COMPANY

(Pays Claims)

Policy

Premium

THE CAPTIVE

ADVANTAGE

Dividends or Lower Premiums

Captive

Premiums

Ceded


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Reasons to Consider A Captive

Alternative to trading dollars with P&C insurers

Coverage tailored to specific needs

Greater control over claims and loss control

Accumulation of investment income---reduces net costs

Incentive for Risk Management activities---further reducing net cost

The Cs:

Cost

Coverage

Control


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Why Take AGroup Approach?

Increased buying power means lower costs

Economies of Scale

Fixed Costs spread over a large group lowers costs

Ability to share risks means lower risk to an insurer,

which means lower costs to individual participants

A group can create the capacity to insure risks the

commercial insurance market wont


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Our Partners

Rent-A-Captive Facility:Citadel Re Bermuda

Fronting Carrier

Philadelphia Casualty Lines

Third Party Administrator

Broadspire Workers Compensation

Captive ManagerCedar Consulting


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Risk Management Services

F

or all participants in The Captive Advantage, LLC program, the LLC willprovide the following risk management services:

Identification and assessment of exposures to loss

Review of internal policies/documents as they relate to risk management

Development of training materials to improve risk and safety awareness

Augment risk management communication

Participant-focused claim procedures designed to ensure timely closure

Litigation management assistance as it pertains to claims settling

Periodic reporting quantifying participant loss control

Participant training provided for the LLC on-line claims reporting system


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Here are some important factors to keep in mind when evaluating The

CaptiveAdvantage , LLC:

This is an Insurance Captive created exclusively for Human & Social Services organizations and this

program has the potential to significantly reduce your costs for property and casualty insurance.

Only known Captive in the United States for the H & SS industry.

Here is some information about our progress in developing this innovative and cost savingprogram.

The Key Program, Bay Cove Human Services, Justice Resource Institute, YOU Inc., Spectrum Health

Systems Inc., have joined North American Family Institute in The Captive Advantage. Many leading

human service organizations are considering participation.

The TCA program has been evaluated by members of the legal community as well as reputable

auditors and insurance consultants and recommend to their clients.

North American Family Institute saved over $200,000 in insurance costs in FY2009 and captive

members saved over $450,000 in insurance costs for FY2010.


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Here is a free tool which could assist you in evaluating The CaptiveAdvantage , LLC:

TCA is continually looking to add members who would benefit from such a program. TD Insurance currently provides

Human Service Agencies interested in evaluating the TCA program with a tool that we refer to as the Rear View Mirror

analysis. This process will allow you to view a Pro-Forma of your insurance program should you had been a participant

in this group captive from approximately five years or as far back as your provided loss run record to present. We feel

that this is a beneficial tool for organizations that are examining this group captive solution at no cost to your agency.We are confident that if afforded the ability to perform this analysis, you will find the opportunities that this program

presents to its members worthy of further discussions.

To Conduct this Rear View Mirror Analysis, we would simply need the following information:

Package Policy

5 Years ofPremium - Broken down by Line of Coverage

i.e. Property, Inland Marine, Crime, General Liability, Professional Liability, Abuse & Molestation, and Automobile

5 Years ofLoss Runs If you are currently with Philadelphia Insurance, we need the Underwriting Detail Report -

you can request this from your insurance broker.


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BOARD OF MANAGERSThe Captive Advantage LLC

As of July 1. 2011

Paula Aiello - Y.O.U. Inc.

Dr. Yitzhak Bakal - North American Family Institute Kerry Horgos - Bay Cove Human Services

William Lyttle - Key Programs

Janet Langlois - Spectrum Health Systems

Mark Schueppert - Justice Resource Institute

Robert Vermes - The Captive Advantage LLC

Dan Nakamoto - North American Family Institute

Roger Marcorelle - Banking Executive

The Property and Casualty Insurance Captive Innovator Profile

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