Feasibility & Check-Up Services
Different clients have different metrics when evaluating the feasibility of a captive insurance program. There are some tried and true capital and risk finance decision making criteria and methods which we will adhere to as we work through each unique program.
Amethyst approaches new captive feasibility and assessment services using a phased-in three stage approach.
Stage 1 – Preliminary high-level vetting: “Does this make sense?” or “Is it possible?” stage. This is typically accomplished within a few phone calls.
Stage 2 - Assess preliminary economics through modeling and check for best fit from a regulatory and structural perspective. If there is a “GO” decision move to Stage 3.
Stage 3 - Formalize findings and recommendations in a written report geared to support the domicile application and to present to management team or Board.
Typical Steps in a Captive Feasibility\Assessment Project
- Project scope aligned to organizational (parent or group) goals through inquiry
- Pure captives - meet with parent\owner company representatives to discuss organizational goals, parameters of service and desired level of management involvement
- Group captives, meet with organizational promoter(s) and leaders. Assist, moderate or lead discussions, as necessary to explain group program operating process and procedures for board & member participation
- Review current and projected risk finance & insurance programs
- Identify key risks\lines\layers suitable for inclusion in captive program
- Collection & sharing of data and with client team: premium, loss & study assumption data
- Collaboration with expert client resources: finance, legal, risk management, actuarial, claims, tax, and accounting
- Actuarial analysis, broker quotes, tax opinion\review and other primary inputs collected and organized for study
- Quantitative analysis – economic, financial, capital structure, cash flow impact compared to competing program alternatives
- Qualitative analysis – administrative, domicile selection, compliance, cautionary measures of forming and operating a captive insurance structure
- Presentation of findings: written, discussed, and presented as necessary