| Summary: | 碩士 === 國立臺灣科技大學 === 企業管理系 === 99 === From 911, the largest insurance loss, to financial crisis in 2008, we learned there are no banks and insurers, which will never go bankrupt. In the past, most companies transfer their risk by insurance, which cost is lower. However, major and frequent losses occurred and impact international and domestic insurance market in the recent years. There could be a possibility to turn hard in the future.
The framework of total cost of insurable risk (TCOIR) is one of the ways to measure the cost of insurable risk for an enterprise. Enterprise will have diffrenent TCOIR whten they go a traditional insurance, or go with captive model.
From an empirical study to an electronic company, we used capital budgeting to measure the feasibility for founding a captive through risk retention and re-insurance strategy. In addition, we also found what impact the captive operation would suffer while the change of external environment or the catastrophe occurred through situational analysis. Then we can fine-tune the captive strategy.
In hard market, an enterprise could bear the higher insurance premium with higher deductible and different conditions. A captive can help enterprise to bundle the risks collectively, and free up capital for the group’s core business. Market premium and capacity vary substantially over the long term. Optimising group risk retention through a captive shields the parent from insurance market volatility.
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