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April 30, 2012

Is a Captive Right for Me?

The Captive Insurance market is growing and is becoming increasingly available to middle market companies. Long thought to be a tool exclusively for Fortune 500 companies, captives today are available for companies paying as little as $150,000 for their Workers Comp, Auto and General Liability premiums.

Captives come in many different shapes and sizes, from group captive insurance companies to single parent and “micro captives”.  Existing group captives are especially attractive to middle market businesses because the upfront capital requirements are minimal when compared to establishing a new captive insurance company.

Group captives aren’t for everyone. They make good solutions for companies who are focused on preventing and controlling losses through documented safety and claim management programs. These captives reward good loss records in the form of dividends which represent the underwriting profit and investment income normally retained by the insurance company.

Typically, group captives have high barriers to entry as the other captive participants (owners) wish to associate only with best in class companies who share their philosophies and best practices.  And applying for entry into a group captive program is not like applying for traditional insurance.  This is where an insurance professional who knows and understands the captive insurance landscape can help prospects qualify for entry.  Whether it’s safety program analysis, recommendations, implementation, documentation, training, OSHA compliance or ongoing claims consulting, the right insurance professional positions clients to gain control of their insurance destiny through these group captive arrangements.

Have you have ever wondered if there’s an alternative to the pricing cycles of the insurance business?  If you would prefer that your future premiums truly reflect your individual performance, there is another way.