Captive Insurance

What is Captive Insurance?

Captive insurance offers a unique and strategic approach to managing your business’s risks. A captive insurer is a specialized insurance company that is wholly owned and controlled by its insureds. The primary purpose of a captive insurer is to insure the risks of its owners by pooling their resources. This innovative approach helps businesses avoid the fluctuating premiums associated with the traditional insurance market, which can be influenced by external factors unrelated to your loss history.

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How Does Captive Insurance Work?

When you join a captive insurance company, you become an owner and participant in the captive. This means you have a stake in the company’s profits and a say in how it operates. To join a captive, insureds purchase stock, which serves as an investment in the company. This investment is then used, in part, to pay claims for losses during the policy period.

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One of the significant benefits of captive insurance is the ability to take greater control over your risk management. By participating in a captive, you are not subject to the same regulatory constraints as traditional insurance markets, allowing for more customized and effective risk control measures. As a result, insureds are incentivized to minimize losses and enhance their overall risk profile.

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Commitment and Investment

Joining a captive insurance company requires a commitment to the program. Typically, you are expected to stay in the captive for at least one policy period, with a recommendation to remain for a minimum of three years to fully understand and benefit from the captive insurance model. The initial investment to buy into a captive can be significant, depending on the nature of your business. However, the long-term advantages, such as stable premiums and potential underwriting profits, can make this investment worthwhile.

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Why Choose Captive Insurance?

Captive insurance offers numerous advantages, including:

• Stability: Bypassing the volatile traditional insurance market, leading to more predictable premiums.

• Control: Greater influence over risk management and claim handling processes.

• Profitability: Potential to share in the underwriting profits of the captive insurer.

• Customization: Tailored insurance solutions designed to meet your specific business needs.

 

Get Started with Captive Insurance

Our team of experts has extensive experience in working with captive insurance companies. We can guide you through the process of joining and investing in a captive, ensuring you understand all aspects of this strategic risk management solution. Contact us today to learn more about how captive insurance can benefit your business and provide the stability and control you need to thrive.