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Group captive commercial insurance programs were created because the traditional market was not adequate for discriminate insurance buyers. Larger commercial operations with good claims history were paying higher premiums to support the poor claim performers. In return, savvy business owners with good claims experience were seeking alternative methods to insure their operations with enhanced coverage’s coupled with “fair” premiums to pay.
Our comprehensive insurance services are focused on strengthening & sharing our group captive expertise. Our professional abilities have propelled our success in the following disciplines:
A group health captive is a self-funded insurance solution where multiple employers pool their health risks to achieve cost savings, greater control, and improved coverage flexibility.
Life insurance is essential for business owners providing financial protection for their families and ensures business continuity in the event of their passing
Group captive commercial insurance programs were created because the traditional market was not adequate for discriminate insurance buyers. Larger commercial operations with good claims history were paying higher premiums to support the poor claim performers. In return, savvy business owners with good claims experience were seeking alternative methods to insure their operations with enhanced coverage’s coupled with “fair” premiums to pay.
The inspiration to form group captive insurance arose from the turbulent and inefficient insurance crisis of the 1970s.
The motivation to create the form and functionality of the group captive model solidified in the early 1980s.
Insurance is cumbersome and complex to most organizations. Renewals, experience modifiers, audits, coverage options, and components of this negotiation cost upper management significant time and money. At Parrish & Gwinn, we can prove to you and your team that a captive takes a fraction of the time to manage, provides better coverage, and could generate substantial wealth for the company or the owners.
With a few minutes of your time, we can show you the advantages to owning your own insurance company and just how easy it can be to control your insurance destiny.
Being in a group captive is not an opportunity afforded to all companies. Only those with good loss ratio’s, strong financials, and an emphasis on the safety of their employees are eligible and deserving. Being the “Best in Class” is a tough concept to define for sure, though given the company we keep and the clients we insure – “Best in Class” is who we surround ourselves with.
Explore our Frequently Asked Questions for quick answers the basics of captive insurance.
We have a proven track record successfully managing captive insurance programs with specialized knowledge in captive insurance, including regulatory requirements, tax issues, and claims management.
Our firm offers risk management consulting and assistance with loss control programs, helping you proactively manage risks and reduce future claims.
Depending on the type of operation, captives require $150,000 in premium combined for Workers Compensation, General Liability and Automobile coverage. Some of the lighter less risky operations (plumbing, electrical, grading, retail, restaurant, etc.) can join if their premium is greater than $100,000 for the three coverages listed above. Plus, the company must have a good safety record, sound financials, and adequate risk control.
There is no financial risk associated with being a member of a captive. Captives are reinsured and fronted by large carriers just like you would find in the traditional market. Each member pays for that protection. This is not self-insurance.
There is no downside to joining your own captive. There is an upfront capitalization fee for the stock and collateral is also a function of the program but, you earn investment income on these items and it is substantial. Many of our members love this component as it gives them a good place to put their money and watch it work for them.
Coverage is extremely broad in a captive as all members share the same coverage template. However, if there is a special coverage your operation needs, we can schedule that into the captive coverage. Coverage can be custom tailored to fit your needs.
Parrish & Gwinn will assist in the selection of your captive. There are many components to this decision. Account size (some captives have large minimum premiums), type of risk (some captives are homogeneous and some take many different types of operations), and the size of the membership (some members do not want to be a part of a large captive). Plus, we would pick a captive with the same type of exposure your company has. For example, we would not want to place a clothing store in a captive with roofers. The reinsurance charges would be far too high for the clothing store as they do not have that level of exposure and therefore would not need to have that type of reinsurance cost associated with their program.
Dividends begin paying out in the third year after inception of the captive. For example, if a member joins in January of 2000. They would get the dividend for that year in 2004. Every year after that, the member would receive a dividend for that year that expired three years before.
There is a 99.7% retention rate for all Captive members.
Only you and the other members own 100% of the stock in your captive. None of the providers, consultants, or reinsurers have ownership. This is why it works. It is your company, you own the stock and all the assets will come back to you.
Please see question 1 above for the obvious reasons. However, many prospective captive buyers are not given the chance to be a part of a captive. Why, because their brokers do not represent them or know anything about them. The only way to know if this type of program can work for you is to let someone who is a specialist in the captive market look into your options. If you ask a Ford salesman to find you a Chevrolet, there will be problems on the horizon.
I have asked that to all of my members and the most common answer is “I wish I would have started my captive sooner than I did, I wasted so much money!”
Reach out to our team for tailored insurance solutions, expert advice, and prompt assistance with all your coverage needs.
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Earning Underwriting Profits & Investment Income through Group Captives and Risk Management
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