Captive Insurance - Thoughts?

TRKINSURE

Active Member
10
Hi guys - given the name, I'm an insurance broker . There is a lot of talk lately, due to the hardening of the market, regarding captive insurance programs. What are your thoughts?

A captive in essence is a group of likeminded individuals with similar operations who pool their money (otherwise insurance dollars) together to form an off-shore (yah I know) insurance company. They when purchase in bulk, an insurance policy for the large group with a very large deductible. When you have a profitable insurance year, you reap the benefits. That's a very broad overview, obviously with insurance nothing is without detail..

While I do have vast knowledge on the topic (I have worked on 2 operating in Ontario here) I want to know what the buyers think of the programs out there. What are your deciding factors on when to (or not to) join in something like this? PRO's/CON's??? I want to hear it all from you.

Is there anything that can be improved to make the transition into something like a captive easier? I'm all ears... I can't stand asking my hard working customers for $15,000 - $20,000/per unit for a Cali lane... not getting those premiums yet????? be prepared..
 

loaders

Site Supporter
30
Truckinsure, I would be interested in hearing your thoughts are as to what you feel is driving this anticipated increase in insurance premiums. Has it been an increase in loss ratio across the industry, or is it a result of the continuing low interest rate environment causing the decline in insurance company profits?
 

TRKINSURE

Active Member
10
Truckinsure, I would be interested in hearing your thoughts are as to what you feel is driving this anticipated increase in insurance premiums. Has it been an increase in loss ratio across the industry, or is it a result of the continuing low interest rate environment causing the decline in insurance company profits?
I think it's both. Primarily driven by high loss ratios. It's not uncommon for an insurer to show triple digit loss ratios. Trucking has been a class of business which isn't profitable and its a hardening market (specifically in trucking).

Mismanagement of claims and high loss reserves are driving down profits. And those (profits) that the insurer realizes, don't make near the interest they once did.

With the editing of a couple insurers over the past couple of years (shrinking the pot), and other best in class carriers moving to a captive, you're removing the large, profitable carriers from subsidizing the guys who are costing everyone.

Rant over
 

lowmiler88

Site Supporter
30
Been in a Captive for 7 years, best thing we ever did, you have to be financially stable (very) and you have to have a good record. After that you are really Master of your own Destiny, I know there is one run by an Insurance Company which still wants profits, we run our own and have a management company that works for a fee only. It is very complicated and takes a while to understand but we are basically our own insurance company and all members have to be like minded towards safety.
 
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