Over 50% of U.S. businesses now utilize one or more forms of
Alternative Risk Financing to manage those insurable exposures (A.M. Best)
Captives are useful and versatile risk financing tools that can provide organizations with greater flexibility, control and accountability within their risk management programs and provide protection for assets that are cost-prohibitive or not available within the traditional market. The creation of a captive is also the most cost efficient method of managing the risk and costs associated with and rewards responsible organizations with the return of underwriting profits and investment income that are typically lost within the traditional insurance marketplace.
Who is the Best Fit for a Captive?
A captive isn’t for everyone. Organizations that have implemented a successful and thorough risk management strategies, profitable companies with good loss histories and high premiums were the first to take advantage of the benefits provided by the formation of a captive insurance company. The list of business reasons for entering into a captive arrangement continues to grow as legislation changes and more states become viable domiciles for your captive company.
Why Should I Form a Captive?
Due to the unrivaled benefits and flexibility provided by a captive insurance company, the best risks continue to leave the traditional market. Savvy business owners with the desire to custom-tailor their insurance policies and the need to control the claims process continue to transition their organizations risks into alternative risk financing programs to better position their organizations for long-term growth and profitability. Although there are many potential benefits for forming a captive insurance company (asset protection, cash management, etc.) the most important reason for captive is that it is the best method of reducing and managing an employer’s long-term cost of risk.
Is a Captive Right for Me?
The formation of a captive insurance company is a detailed and potentially complicated process. From the initial risk assessment, to the feasibility study, to the domicile selection and formation of your captive Assurance Partners has the capabilities and knowledge to help evaluate your organization’s unique risk management culture, existing programs and exposures to help you determine if a captive insurance program is right for you.