The ability to have a level of control over your insurance destiny may sound like a foreign concept. Insurance and it’s pricing are typically tied to the ‘pool’ of customers that a carrier insures and rates are driven by that pool’s losses. Your premium includes fees for the carrier’s marketing expenses, administration, and overhead. Even with a year of no claims, there’s a chance that your rates could be adversely affected.
Group captives work best for good, safe companies spending over $150,000 for a combination of the worker’s compensation, general liability, and auto. The ability to get a return on your investment, being about to manage your own claims, selecting whom you are insured with are just a few of benefits of such a program.
When a company creates a captive they are indirectly able to evaluate the risks of subsidiaries, write policies, set premiums, and ultimately either return unused funds in the form of profits or invest them for future claim payouts. Captive insurance companies sometimes insure the risks of the group’s customers.
Members who join seem to like the following:
- It provides the same protection as a regular, guaranteed cost plan, but gives insureds a chance to earn back 60% of their premiums.
- Premiums every year are based on each insured’s last five years of losses. No artificial rates are used.
- That 60% sits in an interest-bearing account, making investment income.
- There’s no “unknown” risk involved.