Reinsurance and Captive insurance
The business nature of reinsurance companies requires substantial actuarial expertise as well as in-depth knowledge of the covered risks. In our Swiss practise we have worked with many Swiss and International reinsurance companies in the area of risk quantification. Our services include areas such as:
- External Appointed Actuary Mandates
- Swiss Solvency Test and Solvency II
- Independent Reserve Reviews
- Reserve Uncertainty Analysis
- Pricing
- Underwriting Support
An increasing number of companies are establishing captives as an answer to their insurance problems e.g. as a means to address rising cost of premiums and to provide insurance coverage for their group companies for certain classes of business which are difficult to insure.
However, operating and managing a captive is ever more challenging with the need to deal with various complex issues. These range from regulation to tax, to actuarial assessment and pricing and from emerging risks to claims, litigation and reinsurance recoveries.
Captive owners have generally relied upon their captive managers to deal with these issues, however captive owners are often inundated with daily business and need expert advice and resources to cope with these challenges.
Due to more stringent audit and regulatory requirements and the increased focus on corporate governance, captive owners should consider obtaining advice from an organisation that is not affiliated with the insurance broker or captive manager firm to conduct strategic and actuarial reviews of their captives.
The Deloitte team can work with captive managers to provide appropriate actuarial advice and support. These assignments could include:
- Assistance in modelling the captive’s solvency requirements in line with risk-based solvency frameworks (e.g. Solvency II, Swiss Solvency Test or other)
- Review of the captive‘s reinsurance programme to assess its effectiveness. Reinsurance options are assessed and their impact on important financial measures such as capital requirements is identified.
- Estimating future claim liabilities with actuarial techniques and determining the correct level of reserves thereby helping to benchmark a captives reserves against other clients or industry patterns.
- Take on the mandate as external Appointed Actuary in line with regulatory requirements.
- Assessment of both historical and projected performance against the evolving business needs of the parent organisation.
- Review of premium rates and coverage levels to ensure risks are accurately covered. If appropriate we can advise on premium rates for individual divisions and territories of the organisation.
