A Strategic Approach to Funding and Managing Self
Insured Health Risk
As self insurance continues to expand across the health insurance landscape, employers, risk takers, and capital sources are increasingly challenged by the volatility inherent in traditional stop loss markets. Rising medical inflation, the growing severity of catastrophic claims, specialty pharmacy, and emerging cell and gene therapies have driven significant year‑over‑year premium increases and uncertainty in commercial stop loss pricing. In response, medical stop loss captives have become a fast‑growing alternative funding mechanism for managing self insured health risk.
Medical stop loss captives allow participants to retain and better control a portion of their risk, while still protecting against catastrophic claims through reinsurance or excess coverage. By pooling risk among similarly situated participants, captives smooth volatility, improve pricing stability, and enable participants to capture underwriting profit that would otherwise accrue to commercial carriers. For many organizations, captives serve as a strategic middle ground—preserving the transparency and control of self insurance while mitigating the risks that can derail stand‑alone programs.
Actuarial Support Across the Captive Lifecycle
WSP supports captive owners, managers, and related stakeholders with actuarial insight that strengthens decision‑making from feasibility through inception and ongoing operation. This analysis considers whether a captive is the appropriate solution for a given risk, and whether the captive is structured to perform reliably under real‑world conditions as exposure, volatility, and capital requirements evolve over time.
Feasibility and Formation
Actuarial insight is critical from the earliest stages of planning, to assess whether a captive has the potential to perform as intended over time. WSP supports captive feasibility and formation by evaluating underlying product, market and risk assumptions to determine whether and how the captive should be established to align with owner objectives.
Retention and Funding Strategy
Retention and funding decisions shape how a captive absorbs volatility and manages capital. WSP helps clients evaluate retention levels, risk‑sharing arrangements, and funding strategy to ensure decisions are properly aligned in support of the captive’s ability to remain resilient as experience develops.
Ongoing Performance and Regulatory Support
Captives require ongoing actuarial oversight to meet financial targets and remain sustainable. WSP provides ongoing performance and compliance support through experience review, reserve evaluation and professional actuarial opinions, , helping clients assess whether results remain aligned with original assumptions and regulatory expectations.
Building Captive Structures That Hold Up Over Time
How We Support Better Captive Decisions
Understanding the Captive Context
We begin by engaging multiple stakeholders to understand the captive concept, organizational goals, risk profile, and decision context shaping the opportunity.
Evaluating Feasibility and Structure
We assess viability, structure, and funding considerations to determine whether the captive arrangement is commercially and actuarially sound.
Refining Retention and Strategy
We help clarify retention decisions, pricing requirements, and structural assumptions so the captive is built for resilience rather than short-term convenience.
Supporting Ongoing Performance
We provide ongoing performance review, sustainability assessment, and actuarial input tied to operational and regulatory needs through frequent reserve analysis and annual statements of actuarial opinion.