employees. The captive looks at companies that are already partially
self-funded and are currently using medical stop loss.
As well as a conservative approach through its risk-reward model, the
stabilisation of renewals and member engagement in the captive have
been key drivers behind the captive’s success.
“If you look at the overall spend for health insurance, stop loss is
approximately only 15 percent of a company’s spend; the other 85
percent is below the group deductible.
“Success in the captive is a result not only of the conservative nature
of the captive layer, but also its members having the ability to affect
their overall spend,” says Parrilli.
The stabilisation of renewals also comes from the group captive
having a good relationship with its fronting carrier.
“You always want the fronting carrier and reinsurer to do well, you
want them to be viewed as a partner, not just the stop loss carrier,”
“Success in the captive
is a result not only of the
conservative nature of the
captive layer, but also its
members having the ability to
affect their overall spend.”
Merkel adds: “We know that this group at the end will outperform the
marketplace, and that makes it very attractive to its stop loss carrier,
and has in turn, helped to facilitate renewals each year, and solidify its
relationship with the carrier.”
In terms of member engagement, the group captive has best practices
that members follow, along with opportunities in the form of workshops
Parrilli says this engagement is key, and that having a culture of
participation in a group captive is vital to its success.
“You bring in companies that have shared ideals. They want to
be owners, they understand that the health insurance market is
continuously changing, and they want to find other ways to provide bestin
class benefits to their employees without passing the cost down year
after year. That’s what the members of this group strive for,” he says.
“What differentiates this group is that it ensures that members want
to be engaged. If they don’t want to be actively involved, then we don’t
believe that they’re a fit for the programme,” Parrilli adds.
“Moving through the underwriting process on the health insurance
side, and looking at large claims details, are among the triggers that
lead us to having the conversation with companies about being an
owner of the group. If all those things—the underwriting, all the
conversations about engagement—work out, then that’s who we look
to bring into the captive.”
Joe Parrilli is vice president of Captive Resources. He can be contacted
Jim Merkel is senior vice president of Captive Resources. He can be
contacted at: firstname.lastname@example.org
www.captiveinternational.com US Captive 2018 19