When looking for insurance coverage for your business, you may find that insurance captives have more affordability and protection than a traditional insurance carrier. However, the needs of the captive may evolve over time as risks develop or emerge, leading to changes in the way the captive operates or conducts business. A strong captive risk management program will evaluate the captive’s performance every so often to assess the need for change.
Questions to Consider
Just as you may consider the efficiencies of your business operations, a captive will also perform a reassessment of exposure. Captive owners should consider the following questions during this assessment process.
- Is the risk profile still closely aligned with the goals of the captive?
- Will any of the changes made to the company affect different areas of the captive and to what extend?
- What are the specific implementation strategies that you need to help solidify these changes?
- Will any of the existing structures within the captive still work after the changes?
- Does your current or intended restructuring still comply with federal laws and regulations?
Captive insurance solutions are a great coverage alternative for many businesses, but the company needs to be efficient and effective to remain sustainable. Reassessing the risk solutions and processes helps encourage profitability as well as which structure works best for the captive partners.