There are many businesses out there that are spending a lot of money every month and every year on various types of insurance. If your business is like most, you may wonder whether there is an alternative way to help you manage your risk. The answer may be in a captive, and a captive consulting firm can work with you to determine whether it can work for your company.
If you are not sure what a captive is, this article will provide a brief overview and you can discuss it in more detail with a captive consulting firm. Captive insurance is an alternative way to manage risk for large, and increasingly medium-sized businesses as well. It is not necessarily new, but the number of captives has increased significantly since the 1980s.
With a captive, members manage the insurance risk and financing for all the insureds, and usually the members are also the primary insureds on the plan. Members of the captive, as a group, control all aspects of the plan, including underwriting, claims, deciding on investments, and also membership.
The main reasons many companies choose to participate in captives include stabilized (and potentially lower) costs for insurance, increased capacity for providing insurance, and control over the rates, underwriting, and investments made by the insurer.
There are many different types of captives, some of the most common being Risk Retention Group, Single Parent, Association, Agency, Protected Cell, and Rent-a-Captive.
If you have been looking for an alternative way to insure your company that can help stabilize prices, manage risk, and in some cases even reward you with profits, talk to a captive consulting firm today.