Will A Group Captive Insurance Program Save You Money?
RISK TRANSFER ALTERNATIVE WITH LONG-TERM STABILITY, LOWER COSTS AND GREATER CONTROL
With traditional insurance, the better companies subsidize the premiums of companies with higher claims. That’s just the way it works. Using a selective Group Captive eliminates the cost of such subsidies which can range from 15% to 30% of total premium. Moreover, Group Captives capture significant savings attributable to lower operational, administrative and tax-related costs.
GROUP CAPTIVE ADVANTAGES
- Lower cost
- Long-term control & pricing stability
- Enhanced loss prevention
- Enhanced claims management
- Potential for significant return on premium paid and reserves held
- Broader insurance coverage
- Advanced risk management strategies
WHAT IS A GROUP CAPTIVE INSURANCE COMPANY AND HOW DOES IT WORK?
A Group Captive insurance company is a licensed and admitted, limited purpose property and casualty insurance company, owned by its members under Internal Revenue Code (IRC) Section 831(a). The Group Captive provides risk coverage insurance policies for its member-owners’ companies in place of coverage through a traditional carrier. Members are generally different companies — normally from the same industry — having similar insurance needs and better than average claims experience. Members benefit directly from the Group Captive’s underwriting profits.
WHY USE A GROUP CAPTIVE?
- Your company practices and claims results are better than average.
- Group Captive implementation and ongoing costs are considerably less than a private captive.
- You pay a lot of premium, but not enough to make a private captive economically viable.
- You want the economic advantages of a captive insurer without the burden of actively managing it.
EFFECTIVE LOSS PREVENTION AND MANAGEMENT INCENTIVES
Group Captives put safety and risk management in the forefront. Members have the incentive and realize the rewards of focusing on loss prevention and claims management. They can control costs and potentially capture the “profits” (i.e., unused premium) through dividend distributions. Unlike most traditional insurance, a percentage of each member’s premium is set aside for loss prevention and risk and claims management services. Members control the allocation of such funds according to their specific loss prevention and safety needs.
GROUP CAPTIVE COVERAGES
- General Liability
- Workers’ Compensation
- Commercial Auto Coverage
- Property Coverage
- Medical Stop Loss
TAKE CONTROL, CAPTURE THE EFFICIENCIES, INCREASE YOUR BOTTOM LINE
To learn more about Group Captive Insurance, please visit our Group Captive Insurance FAQ page. You may also contact one of our Risk Management Consultants today at 516-683-6100 or by email at GroupCaptives@ChernoffDiamond.com.