Is a Captive Right for Me?
Is a Group Captive Right for Me?
A few questions about safety, size, claims history and financial strength will tell you whether a group captive is worth a closer look.
Start a conversationThe Employer Success ProgramA few simple questions
Generally it is easy to tell whether you might be a good fit for a captive. Ask yourself these questions.
- Do I have a strong focus on employee safety and a great company culture?
- Am I a privately held mid-market company with predictable risks?
- Do I pay more than $100,000 a year in workers' compensation, general liability and auto premium combined, or insure more than 20 employees on my health insurance plan?
- Looking back over the last five to 10 years, are my total claims paid, on average, less than 40% of the total premium I paid? (For this calculation, cap any claim over $100,000 at $100,000.)
- Is my business financially strong, with positive cash flow?
If you answered yes
If you can answer yes to these questions, a group captive may make financial sense.
Every captive member has to be able to meet its claims obligations, so the captive manager reviews each member's finances. Each member also posts collateral, in cash or as a letter of credit, in the first few years until its account has built up enough. And if a year goes badly for the group, members can be assessed, so you want to know you could handle that.
There are more details that decide how much a business will gain from joining. A broker with group captive experience will do a fuller evaluation once a business looks like a likely candidate.
Turning Premiums Into Profits
David Leng's book on captive insurance is written for business owners who are tired of the same insurance cycle every year. It explains how a business paying more than $100,000 a year in premium can take on some of its own risk in exchange for the potential rewards, and why captives have become the most widely used way to do that.
Where the Employer Success Program comes in
It starts with a Diagnostic and Plan. We read your loss runs, your mod worksheet and your key contracts, and we talk with the people who run the work. You get the pattern behind your claims and a short list of what's worth fixing first.
From there our claims, HR, safety and fleet people work alongside yours, and you get a Score Card at the start and every year after, measured against your own starting point.
Start with a conversation
Tell me what's going on. I read these myself and reply within two business days. If there's nothing worth fixing, I'll tell you that too.