Before embarking on the decision to create a Captive, there are a number of things to consider, including the benefits, risks and your overall company profile. These factors combine to play an instrumental role in the decision to proceed or abandon the formation of a Captive for any business.

CPG will lead you through a strategic session where we will review all factors to help you determine if a Captive is a viable option for your company.

The Captive Strategy Process

1. Evaluation
   Beginning with an evaluation and detailed analysis of our client’s business entity, we identify the risk exposure and the financial benefit of selecting a risk alternative solution.

2. Objectives
   Next, we define the objectives for the Captive in terms of Financial and Business ramifications, including the potential effect that forming a Captive will have on your current insurance program.

   • Financial
     • Cash Flow
     • Tax Benefits Financial
     • Effects of the Captive on its Owners
   • Business
     • Risk Management
     • Risk Identification and Loss History
     • Domicile Analysis
     • Ownership Structure of Captive
     • Program Structure
   • Insurance Program Impact
     • How it may reduce your local costs
     • How it will increase the internal risk management awareness within your company
     • How it will help you create a better internal risk management program
     • How it will force a shift in your company culture
3. Existing Insurance Review
   To enhance our analysis of the benefits of forming a Captive, your existing program needs to be assessed in association with your Captive goals. We will provide comment on the following items, which may be beneficial to your company regardless of your decision to move ahead with Captive formation:
   • Review current premium levels
   • Loss analysis for frequency and severity
   • Identify the fronting carriers
   • Identify corporate risks that may not currently be insured (but could be via a Captive)

4. Feasibility Study
   Drawing together all available information, CPG will determine if a Captive, as an alternate risk solution, makes financial sense for your individual situation.

   Through analysis of this collected information, we determine the theoretical and practical aspects of establishing a Captive on your behalf, which may include the following:

   • Identification of appropriate risk areas, and the development of related risk transfer solutions
   • Coordination input from other key advisors and professionals, including actuaries, accountants and lawyers
   • Outlines for a plan to implement a captive insurance structure
   • Determination of premium ranges, retentions, capital allocation
   • Developing financial projections for a captive structure
   • Recommendations of fronting arrangements and reinsurance opportunities including:
     • Strategic Overview
     • Risk Mitigation Plan
     • Packaging the Feasibility Study
     • Presenting the Opportunity to the Captive Manager
     • Monitoring Implementation
     • Discussion of accounting, tax, and regulatory matters
     • Providing benchmarks for the performance of the captive structure
     • Where applicable or desirable, financial models to show investment yields

5. Strategy Reporting
   The final step in the Captive Process is to present the client with the finding of the feasibility study and our recommendations on how to move forward.

   If a Captive is determined to be a viable solution, CPG can work with you and on your behalf throughout the formation process.