24 Dec Is captive insurance the right solution?

Risk managers of Fortune 500 companies have been taking advantage of captive insurance programs for many years. Whether it’s having greater control over claims, coverage tailored to the needs of the business, tax benefits, wealth accumulation, or lower insurance premiums, the benefits are many. But captive insurance programs are not for every business.

Premium savings vs. program management

Most businesses need to have at a minimum of $250,000 in insurance premiums to even think about setting up or joining a captive insurance program. The premium savings can be significant, and the losses capped for those companies that qualify.

Loss & Claim History

It’s easy to overlook just how much losses and claims affect the bottom line, especially when it is another insurance company that takes everything into consideration. A detailed analysis of claims and loss history often shows that the rising costs of premiums actually correlates with the companies losses. But if your company is seeing rising rates without clear losses, your company might be an ideal candidate for a captive insurance program.

Risky business

Risk adverse business owners might not feel that a captive insurance program is the right solution. All in all, a captive insurance program is basically a fancy way of saying self-insurance. Although a Group Captive is owned by its members, it is fronted by an insurance company and is structured so that the Captive is responsible for only a portion of a catastrophic claim. The fronting insurance company will pick up all claims above the Captive retention. Any Captive insurance program we bring you is fronted by an A+ insurance company. In addition, the Captive is going to have aggregate insurance so we can tell you what your minimum and maximum costs will be. Every Captive we bring you has superior risk management and claims specialists to help you keep losses down.

If your company believes in risk management, has a good track record of losses and claims, pays high premiums, and has a good flow of income, then a captive insurance program might be the right solution for your business. Most brokers have no experience with Group Captives. We do. Contact us to see if your company qualifies to be in a captive insurance program. We can show you how to start making your insurance premiums work for you.