Self Insurance.
For many years, large corporations have used alternative risk transfer strategies to augment commercial P&C policies, reduce insurance costs, mitigate claims and improve risk management. With the changing dynamics among traditional property and casualty insurance companies, these benefits are even more important to small and middle market companies, as well as groups and associations.
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For forward-thinking companies, managing/financing risks and protecting assets have become important aspects of their overall business strategy. Utilizing strategies such as captive models and reinsurance companies provide pathways to being self-insured so that you can better manage claims and retain profits that would normally go to insurance companies.
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We invite you to review this website and contact us to discuss how your organization can obtain the benefits of these alternative risk transfer vehicles.
Self Insured
Strategies
Asset
Protection
of crucial importance in relation to the development or success of something else.
Asset Protection - As with other insurance company structures, our strategies provide added asset protection benefits.
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Risk Management - Conventional insurance typically provides little incentive to improve risk management, as there is no participation in the profitability of the insurance program. However, within self-insured models, the business will benefit from good claims practices and experiences - placing strong incentives on improving risk management throughout an organization.
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Unavailability of Coverage - Our strategies make sense when and where the commercial market is unable to provide coverage for certain risks (including warranty, reputation, regulatory, product liability, business interruption risks), or where the price quoted is unreasonable (such as medical malpractice or construction defect).​
Underwriting Stability - Your customized strategy is less vulnerable to the cyclical nature of hard and soft markets that affect the conventional insurance market - great for organizations that requires accurate financial projections.
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Cash Flow Benefits / Investment Income - Apart from pure underwriting profit, many of these strategies offer the opportunity to earn investment income on the premiums received. Premiums are typically paid in advance while claims are paid out over time. Certain strategies allow you to retain control over the premiums and surplus.
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Taxation - Insurance companies follow special rules with respect to taxes. Statutory tax benefits are available to all insurance companies, including our models. Tax benefits alone, however, should not be the reason behind establishing a captive insurance company or comparable strategy.
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Cost Reductions / Capture Underwriting Profit - Typically, 35% - 50% of the premium paid to a commercial insurer goes to overhead and profit.
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SELF INSURANCE CAN LOWER THE COST OF TRADITIONAL P&C INSURANCE
Once a captive/reinsurance strategy has been established, the business owner (insured) can self-insure their uninsured and under-insured risks. it is common for the insured business to adjust premium and deductible limits with their commercial P&C.
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Insuring Hidden Risk
​Most business owners unknowingly self insure a large amount of risk. Many of these are hidden or “below the surface” risks inherent in the operation of a business.
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Any material risks can be insured.
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If insurance claims are as projected, the reinsurance company (captive) will retain profits that can be distributed to its owners.
