AM Best: Captives outperforming commercial insurers


Captive insurers are outperforming their commercial counterparts on every key financial measure, according to rating agency AM Best.

Captives provide self-insurance for their corporation owners and some write third-party business as well.

Best said that over the past five years the average combined ratio — the proportion of premium dollars spent on claims and expenses — of its US captive composite was a very profitable 85.2 percent, as opposed to the unprofitable 103.2 percent average of Best’s commercial casualty composite.

The captive companies analysed by Best for the report were taken from a subset of more than 200 captive companies, all of which currently are rated. Those companies range in size from $2 million in surplus to more than $3.5 billion. These captive companies write (in size order) medical malpractice, inland marine, general and automobile liability, property, workers’ compensation and other lines.

Best added: “It is well known, given that the majority of single-parent captives use loan-back instruments with their parents, that captives’ investment portfolios tend to be significantly more conservative, and therefore generate less income, than typical investment portfolios for commercial companies.”

To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=227616

You must be registered or signed-in to post comment or to vote.

Published Aug 12, 2014 at 8:00 am (Updated Aug 12, 2014 at 11:45 am)

AM Best: Captives outperforming commercial insurers

What you
Need to
Know
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon

  • Take Our Poll

    Today's Obituaries

    eMoo Posts