A Look Into Group Captives

With various different insurance options available, group captives are worth exploring. It’s become increasingly popular – the number of member-owned group captives has quintupled in the last two decades. 

More Cost-effective 

Captive insurance keeps costs centralized. Members will be able to find more cost-effective services as a group, compared with looking as a lone member. A captive will be able to buy key insurance products enabling each member to manage predictable losses.  

They will also see cost-savings from lower operational and administrative costs, in addition to various tax-related advantages.

Lower Risk 

With reinsurance company backing, the captive keeps its members insulated from market fluctuation and risk. Additionally, as the captive expands, its risk tolerance also rises, as well as its power to negotiate with reinsurers more favorably.

Being sheltered from market volatility, group captives are able to avoid subsidizing the premiums of companies facing higher losses.

Higher Flexibility

With group captives, premiums, unlike with commercial insurers, are kept within the captive, generating investment income that has potential to turn into notable return on reserves held and premium paid. 

Group captives are also have better flexibility during the underwriting process, even though the market typically determines rates. They have the ability to determine deductibles, copays and coverage, as well as pick their own provider networks. Non-fronted captives also offer chances to create their own forms and rates in time. e fronting insurers may provide the same benefit.

Health insurance is a key priority for employees, according to a 2018 Gallup survey. Group captive insurers provide stable coverage and pricing, as well as improved services. There is also a focus on loss prevention and risk control. Thus it can be worthwhile for especially small- and medium-sized businesses and organizations to look into. Brokers can offer key advice on choosing the right group captive for you.

Leave a Reply