Setting premiums for captive insurance companies is one of the most important, and often most challenging, aspects of building a successful captive program. Developing premiums that are commercially reasonable, actuarially sound, and defensible requires the combined perspectives of insurance, actuarial, underwriting, and tax professionals. The session will explore three practical categories of risk:
(1) common risks with credible loss history that are relatively straightforward to price;
(2) common risks where limited or no direct loss experience requires greater reliance on market benchmarks and underwriting judgment;
(3) emerging or alternative market risks where traditional loss history, broker quotes, commercial pricing, or comparable market data may be limited or unavailable.

Through real-world examples, attendees will learn how actuarial methodologies, underwriting judgment, exposure analysis, commercial market information, policy design, risk margins, and thorough documentation work together to support premium development that should meet the expectations of auditors, regulators, and the IRS.

Following this session, attendees will leave with a clearer understanding of developing pricing that reflects genuine insurance economics and well-documented files that tells a credible insurance story and avoids characterization of a premium designed to achieve a tax objective.