Captive Insight Vol I | Page 48

A Successful

CONVERGENCE
OF DIVERSITY
Captive Resources, LLC explains that overcoming challenges
is a true measure of success for group captives.

by Sandra R. Duncan
Vice President-Operations
Captive Resources, LLC

image © Sergey Nivens - Fotolia.com

Member-owned group captives, whether heterogeneous
or homogeneous, are comprised of diverse companies,
both large and small, publically and privately owned,
and with varying operating structures, corporate cultures,
products and services, goals, priorities, etc. How is it
possible to achieve cohesiveness in a group captive whose
many owners seemingly have little in common, and are
focused on the successful operation of their own
respective companies? It is when the captive is faced with
challenges, some inherent in its business model, that
commitment and resolve can be tested. The ability to work
together to reach a consensus on how best to address each
challenge, then becomes critical to the long-term viability
of the captive.

member companies must submit detailed information about
operations/exposures, loss history and current financial
statements. It is possible that additional information of a
confidential or sensitive nature may also be required.

DATA SHARING AMONG THE MEMBERSHIP.
One of the most frequently asked questions by prospective
group captive members is, “How is the confidentiality and
security of my data ensured?” This is certainly a valid
concern, especially given that the members must have access
to sufficient, meaningful data to run their captive properly.
In order to be considered for membership, prospective

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Each member is periodically provided with its own results.
However, when sharing data across the membership,
strict confidentiality is maintained by presenting it in
encoded format. Prior to board meetings, members receive
loss, claims, risk control and other data by member and
aggregated for the captive as a whole. Individual member
data (used primarily to identify members that may require
increased risk control support or monitoring of financial
position) is coded so that members cannot be identified.
Members’ individual equity statements which accompany
the captive’s financials are similarly prepared.
Some captives engage an independent financial analyst to
conduct regular, periodic reviews of members’ financial
positions, and for some, this review is handled by the
fronting company. Access to members’ financial statements
is restricted to the analyst or fronting company, which
adequately maintains the confidentiality of these documents.