Starting or becoming part of a captive insurance organization can be a benefit for individuals and groups, and not just for the coverage provided. Because investors also own the company and have the ability to make changes where necessary, they also reap its dividends. Add this to the lower premiums paid for coverage and the additional benefits offered, those who are part of a captive insurance group can do much better than they would with current, commercial health insurance.
Nevertheless, it’s not as simple as purchasing a few health insurance programs with a few dollars. The benefits of captive insurance come from a large investment of capital in order to pay dividends as well as cover underwriting and potential losses. There are also several levels of captive insurance — single-family, group, and micro-captive as examples. Each has their own premium limits and governing boards. If this seems a bit mind-boggling, yet you want to proceed, then you want to take a look at captive consulting.
There are over 5000 captive companies currently operating. Many of them, like CaptiveResources, have been around since the industry exploded in the early 1980s, thus, they have a full understanding of the captive industry. When you request a consultation, the captive company will come in with pricing knowledge of the current commercial market and help you to lower your costs. They’ll examine your business and available capital, ask you what type of coverage you’re looking for, and determine what risk you are willing to take.
From this, they’ll come up with a number of items. For example, they’ll be able to provide a real-time estimate of costs by utilizing unbiased formulas that calculate premiums based on actual loss history instead of aggregated averages. They’ll also increase buying power by establishing strong relationships with insurance-based groups to increase service and lower member costs. On the risk side, consultants will assist the organization to prevent losses with a formalized risk-assessment methodology.
Consulting within the captive insurance industry is not inexpensive. However, the Return on Investment (ROI) will be significant to the business and the captive’s members once it is performed. So, it’s best to do your research well ahead of time to discover which consulting organization will be the best for you and your health coverage.