Captured insurance companies play a strategic role in helping their organizations reduce volatility and build capacity while navigating the tough market and pandemic, experts say.
Courtney Claflin, executive director – Captured Programs at the University of California, said the university went through its "worst renewal ever" during this time period.
However, it could use its prisoner to protect itself from the full effects of the hard market. increases and internally absorbs the financial responsibility for excluding all coverage lines from the London and Bermuda markets, ”said Claflin.
Mr. Claflin spoke at a session on Wednesday of the Risk & Insurance Management Society Inc's online conference in 2021
The convergence of the hard market and COVID-19 has created a lot of volatility, says Heather McClure, Chief Risk Officer, OU Health at the University of Oklahoma.
"The great thing about having a prisoner is that it reduces that volatility," McClure said. In the hardening market, a prisoner offers "the flexibility to put cover lines in it", either through quota shares or deductibles.
In the state of Oklahoma, the weather, like tornadoes and the recent winter storm, is "a big
With the hardening of the real estate market, OU Health looked at renewal and how its prisoners could work with their real estate program," McClure said. the deduction for wind / hail can we buy down? Does it make sense to put some cover in captivity because it is just too difficult in the commercial market? she said.
For a prisoner, it's a good problem to have, she said. "It's what you were built for, what you were programmed for. can create capacity and lower costs, says McClure. it to the parent organization and financial operations.
University of California & # 39 ;s captive paid receivables for COVID-19. "We have $ 6 million in loss of income insurance due to "International students' studies abroad. It got paid," said Claflin.
Whether it's security, the distribution of money to benefit the university, the absorption of interest rate hikes, or the provision of new coverage lines that lack reinsurance support for exclusions, it is a prisoner "here to support the university hurts," Claflin said.
Ms. McClure said that when COVID-19 struck, the immediate question was "what will the prisoner be used for?"
The beauty of the captured philosophy and structure was the ability to be flexible during this time and decide what was needed  "When the system was bleeding money because of COVID – federal dollars had not come in yet – there was a serious economic need to keep the system afloat. … We needed to save money," she said.
For a period closed OU Health for elective surgeries, which gave the prisoner the opportunity to analyze how it could get the premium back to medical groups at the hospital due to the reduced risk. 19.
"We were able to immediately send $ 1.5 million back to the organization," McClure said.
The OU Health inmate also worked with regulators in Vermont, where his inmates are based, to find a way to provide insurance for locum physicians when Oklahoma saw a sharp increase in COVID-19-positive patients, while "being aware that it would not sell insurance to third parties as a practice ", she said.
OU Health still assures physicians working on COVID-19 ICUs that "we need to provide real-time services to patients," she said.
Prisoner-owned companies are increasingly using vehicles to cover third-party risks, according to reports.