Feasibility Study

Adjure Global Limited is an experienced, regulated and professional insurance manager, based in Guernsey. We offer a range of managed insurance solutions for our clients from around the world. One of the important services we offer is the preparation of feasibility study to find the best insurance solution that is going to work for you?

A feasibility study is undertaken to determine whether a contemplated risk financing programme is feasible for a particular organisation or group of organisations.

A proposal for a captive feasibility study should always begin by stating its scope and purpose and will be needed;

  • for the intended owner
  • to reassure the regulator, as part of the regulatory application process

Formation of an insurance entity puts the owner's capital at risk and needs to be managed well and with care. Shareholders of the entity need to understand why their capital should be used in this way and the potential return for their investment. If the legitimacy or wisdom of the risk financing programme is subsequently challenged, a well-written feasibility study can be invaluable in justifying the decision to form a self-insured programme.

The focus of the study will typically fall into the following categories: Control, Cost and Capacity

The captive business plan should show how the control-cost-capacity objectives can be achieved.


The basic requirements for a feasibility assessment are:

  • exposure values; current and projected (such as payroll, revenue/turnover, vehicles, property values, forecasted profits, divided by each location and subsidiary) – being measures of risk exposure relevant to the risk(s) to be insured.
  • five years' prior loss history (incurred reserve and paid basis), by line of business.
  • the latest annual report or financial statements of insured party(ies).
  • copies of current insurance policies.
  • premium and claims services utilised including the use of third party adjusters (TPAs).
  • reassurance that risks are appropriately and proactively managed.
  • in general, we look to create a captive vehicle with you that retains an acceptable level of risk or loss in combination with a reasonable opportunity to retain profit from taking on such risks including accessing reinsurance to mitigate large or excess claims/losses.

Two questions must always be addressed;

1. the selected method of projecting losses.

2. the premium rating methodology to be used in establishing premiums.

If the proposal makes sense, the feasibility study will recommend the formation of an entity and, if approved by the owner, the manager then begins the application process on behalf of the entity wishing to form the insurance entity.