Converting Insurance Premiums Into Profit in 2019 with a Captive Program
Insurance premiums continue to increase year after year. Even if a company has loss controls in place coupled with low losses, rates are still high. In part because they are “subsidizing” the low performing insureds in their insurance pool. Combine that with the profits reaped by the insurance company, you pay more and have little to show for it. Many companies are looking for alternate risk financing and a captive could be the answer.
What is a captive? In short, a Captive is an insurance company that provides insurance to and is controlled by its owners. For decades, captives have been a great alternative, but only for very large companies. With a captive the owners of the captive reap the benefits of favorable claims experience and investment earnings that would otherwise go to the traditional commercial insurance companies.
Captive members can receive up to 60% of their insurance premiums back in dividends year after year.
For highly qualified clients, captives are now an option. Most clients are familiar with mutual insurance companies who share a small percentage of profits with members in the form of dividends. Captives take the mutual insurance model a huge leap further by bringing best in class insureds together making them the owners of the insurance company. As owners, captive participants become board members of their own insurance company giving greater operational control, grouping superior risk members and reducing costs. These efficiencies become profits for the members.
With over over 38 years experience, our management team has never had a captive fail. Representing over 4,500 insureds, and combined premiums exceeding $2.2 Billion, our process has returned over $1 Billion in dividends to their member owners.
To find out if your company qualifies, contact one of our Captive Specialists for more information using the "Ask A Question" form on the right side of this page or click here use our main contact form.
For clients who meet the minimum premium levels, but do not meet the risk profile requirements, our Risk Management Team can help develop targeted strategies to help get them on track to being accepted to a captive that fits their business. Contact us today to find out more.
