November 14th - 17th, 1999
Hyatt Regency Miami, Florida

Group Captives

George Chaffee, President, Skandia International Risk Mgmt Ltd
Michael Ducey, Asst. VP, Liberty Mutual Ins. Grp
Robert S. Wilkinson, EVP Plan Ops, Health Srvs Medical Corp.
Moderator: Gaelen W. Cole, Mktg Dir., Fireman's Fund Ins. Co.

Monday, November 15th, 2:00-3:15 p.m.

"Group Captives Can Bring Unexpected Bonuses"

Group captives can bring unexpected benefits to member companies, even in a soft market, according to experts in the industry. Robert S. Wilkinson, who has served as treasurer for the Alliance of Community Health Plans Insurance Co., said the group captive provides more than stop-loss insurance to its member plans.

The members in the group have access to a database with information on expensive health-care cases and various treatments. They also can use the captive's research on the best transplant centers in the country--a study a single health maintenance organization could not have done alone, Wilkinson said.

The members of the captive exchange technical information about treatments, and have launched a journal to share additional information, said Wilkinson. "It's become an engine to improve collaboration for our association," he said.

Wilkinson, executive vice president of plan operations for Univera Healthcare, the company formed from the merger of Health Care Plan and Health Services Medical Corporation of CNY Inc., was one of the featured speakers Nov. 15 at the Ninth Annual World Captive and Alternative Risk Financing Forum.

Group captives are captives formed by several companies who pool their resources to launch their own insurance company. Often the companies are motivated by high prices, or volatility in pricing, and seek to take control of their own insurance destiny, said George Chaffee, president of Skandia International Risk Management Ltd.

Once in a captive, member companies find other added benefits.

In a good year, captive members can receive dividends if their premiums were higher than their claims. In addition to that, they also earn interest, which they wouldn't be earning if they paid premiums to a traditional insurer.

"There's no long-term economic value in an expired policy," Chaffee said at the captives forum. "Captives create a long-term stable relationship. It irons out peaks and valleys and gives you what I call the three C's: coverage, capacity and cash flow."

He said captives are not just a product or policy, but are a "financial tool. A captive can be turned into a profit center."