Ratemaking for Captives and Alternative Market Vehicles

Although captives represent a significant part of the insurance market, there is relatively little information on the subject in the actuarial literature. This paper describes ratemaking techniques and approaches that can be used for captives and other alternative market vehicles. To put the discussion in context, the paper begins with a description of various captive structures. It concludes with a discussion of the financial considerations associated with a captive program. Keywords: Ratemaking, Expense Loads, Increased Limits, Trend and Loss Development, Solvency, Credibility, Simulation.