Captive Insurance

Is This Traditional Insurance Alternative Right For Your Business?

What is Captive Insurance & Why is it Growing in Popularity?

Captive insurance is a form of self-insurance where a business creates its own insurance company to cover its risks. Unlike traditional insurance providers, which operate as third-party entities, a captive insurance company is wholly owned and controlled by the insured. This structure allows businesses to tailor their insurance coverage to meet specific risks that may not be adequately addressed by conventional insurance policies. Not all companies can qualify to be part of a captive, but for those that do, it may provide significant benefits.

Read on to learn more about the nuances of captive insurance, how it operates, and who stands to benefit the most from this innovative model. Feel free to give me a call to discuss personally if captive insurance is a good option for your business.

Call 330-464-6924 to speak with Tom Brenner, principal & Commercial Risk Advisor with the Hummel Group.

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Benefits of the Captive Insurance Model:

Cost Savings

Risk Retention

Increased Focus On Loss Prevention

Tailored Coverage

Access to Reinsurance Markets

Flexibility in Capital Allocation

Control Over Claims Handling

Tax Benefits

Long-Term Stability

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Assistance With Safety Plan Development
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Peace of Mind You’re Properly Insured
Keep Up With Ever-Changing Regulations
Keep Up With Ever-Changing Regulations
Limit Unnecessary Insurance Expenses
Limit Unnecessary Insurance Expenses

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Learn how shifting your perspective on risk management delivers tangible results to you, your company and your employees!

Underline

Who is a Good Fit for Captive Insurance?

Significant Insurance Costs
Stable Loss History
Desire for Control
Complex Risk Profiles
Long-Term Perspective
Regulatory Understanding
Financial Stability

Captive insurance is not a one-size-fits-all solution, and certain characteristics make a business a more suitable candidate for this model. Here are some key indicators that a company might benefit from establishing a captive insurance company:

  • Significant Insurance Costs: Businesses that face high insurance premiums—especially those in industries with higher-than-average risks—may find that a captive can reduce costs and provide better coverage tailored to their specific needs.
  • Stable Loss History: Companies with a stable or predictable loss history are better positioned to benefit from captive insurance. A consistent loss record can lead to lower premiums and a more favorable risk profile.
  • Desire for Control: Organizations looking for greater control over their insurance programs and claims processes will find captives appealing. This control can lead to improved risk management strategies and enhanced responsiveness to claims.
  • Complex Risk Profiles: Businesses that operate in sectors with unique or complex risk exposures—such as construction, healthcare, or technology—may benefit from the customization that captives offer.
  • Long-Term Perspective: Captive insurance is most beneficial for companies willing to make a long-term investment in risk management. Establishing a captive requires an upfront commitment, but the long-term benefits can outweigh initial costs.
  • Regulatory Understanding: Companies must have the resources to navigate the regulatory landscape associated with captive insurance. This includes understanding the legal requirements in their chosen jurisdiction, as well as ongoing compliance obligations.
  • Financial Stability: Businesses considering a captive should have a strong financial foundation, as captives require capitalization and ongoing funding to survive and thrive.

Meet Your Insurance Specialists

Tom Brenner

Tom Brenner

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Andy Yost

Andy Yost

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When it comes to insurance for your business, your Hummel risk advisor is going to provide you with a custom-tailored plan that's best for you, not our company.

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