Navigating Captives

SECTION 1

INTRODUCTION TO CAPTIVES

 

SECTION 2

CAPTIVE BASICS

 

SECTION 3

BENEFITS OF GROUP CAPTIVES

 

SECTION 4

TYPES OF CAPTIVES

 

SECTION 5

IS A CAPTIVE RIGHT FOR ME?

 

SECTION 6

HOW TO JOIN A CAPTIVE

 

SECTION 7

831(b) CAPTIVES

 

SECTION 8

HEALTH INSURANCE CAPTIVES

 

SECTION 9

TURNING PREMIUMS INTO PROFITS BOOK

IS A GROUP CAPTIVE RIGHT FOR ME?

 

 

TURNING PREMIUMS INTO PROFITS

 

Is a Group Captive Right for Me?

Generally speaking, it is easy to determine if you might be a good fit for a captive. You just ask yourself the following questions:

 

  • Do I have a strong focus on employee safety and a great corporate culture?
  • Am I a privately-held mid-market company with predictable risks?
  • Do I pay over a $100,000 annually in workers’ compensation, general liability and auto insurance combined premiums, or insure over 20 employees on my health insurance program?
  • If I review my last five to 10 years of claims history, on average, are my total claims paid out less than 40% of the total premium paid to insurance companies over a period of several years? (For this calculation, cap any claim over $100,000 at $100,000 when you calculate your claims to premiums ratio.)
  • Is my business financially strong with a positive cash flow?

 

If you can answer YES to these questions, a group captive may make financial sense. It is important to know that every captive member will need to be able to meet their claims obligations, and therefore they are financially reviewed by the captive manager. Because of this, each member business puts up collateral (or posts a letter of credit) in the first few years until their asset account has accumulated to a sufficient level.

There are additional nuances that help determine how much a business will benefit from joining a group captive. A broker with experience in group captive insurance programs will do a more complete evaluation once a business is identified as a likely candidate.

 

 

 

Get in Touch

 

David Leng, CWCA,

CPCU, CIC, CBWA, CRM

724-863-3420 x 3329

dleng@duncangrp.com

 

John M. Duncan, Jr

CIC, CWCA

724-863-3420 x 3311

jduncan@duncangrp.com

 

 

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