5 Steps to Improving Your Captive's Performance
Risk managers and captive owners are always looking for ways to get more out of their captives. Yet, in the soft insurance market, even if you try to expand the use of a captive, for instance by insuring non-traditional business and financial risks, you still might not increase your premium writings. That's because given the current insurance market conditions the new premium is likely to be offset by a reduction in traditional risks that have been pulled from the captive's portfolio and transferred to a commercial insurance company. There are other ways to boost your captive's performance that can have a significant impact on profitability. In a new article for PropertyCasualty360, John J. Kelly, CPCU, Managing Partner, Hanover Stone Partners, examines ways to manage costs more effectively and drive captive performance. Notably, Mr. Kelly discusses five steps to improving captive performance, including:
reducing reserves by accelerating claim closures
gaining direct access to the reinsurance markets
closing or consolidating excess captives
seeking objective expertise, and
strengthening captive governance
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