If your clients’ premiums keep rising and they’re still not getting the coverage, clarity, or control they expect. It’s natural to start asking: What else is out there?
The traditional market doesn’t work for every business. Sometimes, the best solution means stepping outside it.
But that comes with questions:
-How much risk is your client really willing (or able) to take on?
-Will the savings outweigh the exposure?
-And what’s the smartest path forward?
At Captive Coalition, we help independent agents like you figure out how to answer these questions so you can offer real alternatives.
In this article, you’ll get a clear understanding of two paths outside the traditional insurance market. That way, you can help your clients make smarter decisions, protect your best relationships, and grow your book with long-term, loyal accounts.
Should Your Client Consider Alternate Plans Within the Traditional Market?
Before jumping ship entirely, some clients might benefit from a different structure inside the traditional market. These options let them take on more risk in exchange for potential savings, but they still stay under a carrier’s umbrella.
Here’s what you should know:
Retrospective Rating Plans
Common in workers’ comp, these plans adjust the premium based on actual losses. If your client stays below a certain claim threshold, they benefit. Go over the limit, and they pay more.
This can be a win for safety-focused businesses, but it requires real buy-in and strong risk controls.
Self-Insured Retention (SIR)
Ideal for lines like professional liability or property, especially when your client isn’t big enough for more complex alternatives.
The business pays all losses up to a set limit. It’s like a deductible—but more aggressive. And if multiple claims hit in a year? They’re covering all of them until the threshold is met.
High Deductibles
This is about shaving off the expensive “frequency layer” of coverage—the claims that happen most often and cost the carrier the most.
If your client takes on a $300,000 deductible on a $1M general liability policy, they’re absorbing the claims most likely to occur. That turns the carrier’s role into catastrophic backup, which usually leads to a reduced premium.
Clients willing to carry more risk can buy breathing room and show the carrier they’re serious.
Two Insurance Alternatives Outside the Traditional Market
When your client is tired of playing by the carrier’s rules, it might be time to step beyond the traditional insurance system entirely.
Here are two legitimate options that let your client take back control:
1. Self-Insurance
Let’s be clear: This isn’t technically “insurance.” It just means your client accepts full financial responsibility for certain risks and chooses not to transfer them to a carrier.
This could look like skipping general liability because the premium is outrageous or setting aside capital to handle predictable losses.
But it comes with serious trade-offs:
- No tax advantage: Funds set aside are still taxable.
- No upfront deduction: Claims payments are only deductible when they’re paid.
- No leverage: The money just sits. It doesn’t do anything—until a claim hits.
Unfortunately, there are certain things you can’t self-insure since the government requires you to have some financial responsibility for something like workers’ comp or auto liability. But you can say something like, “You know what? I’m not going to buy general liability for my store because it’s too expensive.”
Some businesses can make this work, but most find it exposes them to too much volatility or restricts cash flow. That’s why option #2 often becomes the better fit.
2. Captive Insurance
Captives are a more sophisticated alternative. Captive insurance is a form of self-insurance where the insureds, or a group of insureds, own and control the insurance company. Your client still takes on more risk, but now they own the insurance company–or at least part of one.
They underwrite their own policies, manage claims, and—if they run a safe operation—keep the underwriting profit.
Whether in a single-parent or group captive, the benefit is the same: transparency, control, and long-term financial upside for well-managed businesses.
And if your client is already using tools like high deductibles, SIRs, or retro plans? They’re halfway to having the captive mindset.
Captives aren’t for every client. But if yours is entrepreneurial, risk-aware, and financially stable, they should absolutely explore it.
Help Your Clients See the Bigger Picture
The traditional insurance market isn’t designed to reward businesses that do everything right. But alternatives do exist—and as their agent, you’re in the perfect position to guide them toward smarter, more strategic options.
If your client is already exploring high-deductible plans, SIRs, or retro rating models, they’re already showing the risk tolerance needed for self-insurance or captive participation.
Captives won’t be the answer for every account. But ignoring them means missing a huge opportunity to deliver more value—and retain your best clients long-term.
What’s next?
- Read our article on the key differences between traditional, captive, and self-insurance for a more comprehensive depth of each model.
- Or have your client take our Captive Assessment to see if they’re a strong candidate.
Finally, become a member of Captive Coalition for FREE to access additional resources, tools, webinars, and training to better help your clients and maintain your book of business.
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