For certain companies looking to gain long-term control over their insurance destiny, captives have provided an enticing alternative. The ability to earn underwriting profit, investment income and gain additional control over their insurance program are reasons why a captive may be the solution for your business.
We have combined our captive expertise with our synergistic approach to risk control and claims management. Successfully wading into the world of captives requires a top-notch safety program plus professional and experienced claim professionals working for you. Our focus is the same should you decide to enter a captive – working for you to ensure safety remains paramount and to work on your behalf to resolve claims quickly.
Is a Captive Right for You?
Captives can be valuable strategic risk management tools, but they are not the best approach for every organization. For some risk profiles, they are not feasible, and could ultimately cost more than traditional insurance. If your business is considering setting up a captive insurer, you must first clearly establish the financial and business goals and objectives of the company through effective communication between senior management, including CFO, risk manager and business unit heads. Together, consider the follow aspects of your company:
- Background and financial goals
- Actuarial or data issues, including loss data or exposure information needed, insurance company expense loads
- Reinsurance marketplace potential
- Tax and regulatory issues
- Desired captive design
Several parameters can assist you in determining whether a captive is a viable option:
- You must be financially stable and have a good loss history.
- Captive expenses should be below 20 percent of premium, unless there is a compelling reason for a higher ratio.
- You must be able to demonstrate your ability to pay for claims and secure future losses.
- You must be able to dedicate considerable attention to the operation of the captive.
If a captive is right for you, combining our alternative market experience with Claims and Risk Control services, we help ensure that the captive world becomes a successful, profitable and long-term solution for your business.
