Many independent agents hesitate to bring up captive insurance because it can seem complex and unfamiliar. However, waiting for clients to ask about captives could lead them to seek advice elsewhere, risking both trust and business.
At Captive Coalition, we educate agents about captive insurance so they can confidently offer it as an alternative. By becoming familiar with captives, you can better serve your clients and keep them from turning to competitors.
By the end of this article, you will have a clearer understanding of captives and how to bring them up with your clients.
Why Agents Hold Back on Talking about Captive Insurance
Many independent agents hesitate to discuss captives because they lack experience with them. It’s understandable–captives aren’t typically covered in standard insurance training, and unless you’ve worked with large accounts, you might not have encountered them before.
It’s common for agents to shy away from captives due to:
- Lack of Confidence: Not feeling like an expert can be intimidating. The fear of not knowing every detail can be paralyzing.
- Familiarity with Traditional Insurance: Traditional models are familiar and easier to explain.
- Misconceptions: Some believe captives are only for large companies or too complicated to benefit most clients. Others believe it will impact commissions.
While these concerns are valid, captive insurance can benefit the right clients. If you’re not offering it, another agent might.
The Stakes: Clients Are Already Investigating
Business owners, especially those with large or complex operations, are always proactive and look for ways to gain control over risk and costs. Captive insurance can offer them an appealing alternative to traditional insurance, with benefits like increased transparency, cost control, and risk customization.
If your clients discover captives elsewhere, they might question why you didn’t mention it. This could harm the trust you’ve worked hard to build.
Building Confidence in Captive Insurance
You don’t need to be a captive expert to start the conversation. Educate yourself on the basics and be transparent about the pros and cons. Captive Coalition has plenty of articles and resources to help simplify the technical details of captive insurance so you can feel more comfortable discussing those options. Our Captive Assessment Tool can help you get started to determine which clients best qualify for captives.
Tips for Agents:
- Educate Yourself: Start with the basics of captives and their benefits.
- Be Transparent: Share both the advantages and challenges of captives with clients.
- Leverage Experts: Don’t hesitate to involve captive experts in the conversation.
Comparing Captives with Traditional Insurance
Here’s how to present captives in comparison to traditional insurance:
- Cost Control: Captives allow clients to influence their insurance costs directly, with fewer unexpected premium hikes.
- Transparency: Captives offer visibility into how premiums are used.
- Customization: Captives can be tailored to specific risks, unlike traditional one-size-fits-all policies.
How Captives Can Strengthen Client Retention
Captives are particularly appealing to business owners who feel trapped by traditional insurance. Talking about captives provides more options for these clients and can strengthen your relationship with them. By introducing captives, you show that you’re proactive, looking out for their best interests and offering a more customized, transparent insurance solution.
Are Captives Optimal for Your Best Clients?
Captive insurance is a powerful option for business owners seeking transparency and control over their insurance. You don’t need to be an expert—just familiar enough to explain the benefits. If you don’t bring it up, your clients may seek it elsewhere.
For more information, start by reading Captive Insurance 101 and our guide on the financial pros and cons of captives to see if it aligns with your client’s best interests.
For personalized guidance or consultation, schedule a call with one of our insurance advisors at Captive Coalition.
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