Capital Financial Statements | Part 3

Let's conclude our three-part series on captive financial statements with a conversation about ratios.

We will talk about the fronted group captive arrangement through a similar lens to how an investor wants to compare multiple stocks.

The reason is that the investor wants to give $1 and have the underlying investment return a profit.

That's what ratios do. A ratio cuts through the glitz and glamour of captive promoters and captive programs.

It allows the investor to understand with clarity the anticipated return on a dollar invested.

We aren't considering the direct rider captive because those financial statements are much easier and don't involve many of these calculations. A direct rider captive is generally a single parent captive so unless the single parent captive participates in our risk pool, you will not find many of these.

The number one thing you need to look for is the fronting fees, administration fees, and quota share.

Remember that the express carrier is probably also the fronting carrier.

Watch the video HERE for more details!