Why should you consider a captive insurance company?
There are hundreds of insurance companies already, so why would a business consider doing this?
Because there are a number of benefits associated with forming or joining a captive insurance company. The list includes:
- More efficient insurance model
- Cash flow
- Transparency and lower operating cost
- Access to investment income
- Focus on loss control and risk management practices
- Customized and flexible underwriting
- Direct negotiating with underwriters
- Access to reinsurance markets
- Improved coverage and limits
The primary benefit however is what most business owners are constantly seeking…..control and influence.
Captive insurance company provides a unique opportunity for business owners to have a much greater voice in their insurance and risk management program. As an owner, you will have a financial interest in managing your own risk and this allows you to have influence over products and services like premium, coverage’s, claims management and settlement, risk control, actuarial, financial and legal. Things happening behind-the-scenes are now available to you as an insurance buyer and financial partner. You can decide how much or how little you want to be involved with these aspects of running your captive insurance company.
While there’s often a focus on the financial benefits of being in a captive, executed properly, participation in a captive insurance company can make your business better overall.