Independent agents face the challenge of choosing between different captive providers that offer various structures and approaches. Captive Coalition and Captive Resources (CRI) are two options with different considerations, such as group size, flexibility, transparency, and agent involvement.
It’s important to make this clear: Captive Coalition might not be the ideal choice for you or your client. Both Captive Coalition and Captive Resources (CRI) vary in structures and priorities. Captive Resources (CRI) might very well be a better option for you when it comes to the world of captive insurance. Both Captive Coalition and Captive Resources have extensive experience in the field of captive insurance. This article will help you decide if either of these consultants might be the best fit for your clients.
Knowing Captive Insurance: The Basics
Captive insurance is an alternative to traditional insurance that lets businesses control risk more effectively. Captives are insurance companies created by a single business or a group of businesses to cover their specific risks. They provide greater transparency, potential cost savings, and customized coverage.
What Independent Agents Should Consider for Their Clients
Choosing between Captive Coalition and Captive Resources (CRI) comes down to some considerations for independent agents:
- Client Retention: Some captive providers work exclusively through agents, so they remain involved throughout the process. Others might have more direct access to business owners, which can appeal to businesses that want a closer relationship with the captive manager but might lessen the agent’s involvement.
- Group Size and Transparency: Smaller captive groups often offer more control and transparency for independent agents and clients, giving clearer communication and collaboration. Larger groups can offer more broad risk-sharing opportunities.
- Customization and Flexibility: Flexibility in adding multiple lines of coverage can be important for a business with diverse or complex risk profiles. Some captives have a wider range of options that allow businesses to customize their risk management strategies more precisely. Others might have a more focused approach that caters to specific types of coverage.
- Location and Comfort Level: A captive insurer's location can influence administrative ease and comfort level. Onshore captives can simplify the regulatory processes and provide a greater sense of transparency for some clients. Offshore captives, commonly based in domiciles like the Cayman Islands, can provide certain regulatory advantages, though they may also introduce added complexities in management and perception.
Captive Coalition v. Captive Resources (CRI): The Differences
1. Client Focus and Approach
Captive Coalition and Captive Resources approach relationships differently between agents, businesses, and the captive structure.
- Captive Coalition: At Captive Coalition, independent agents are seen as partners. Captive Coalition works exclusively with independent insurance agents so that the business owner is never left without the support of the agent they’re the most comfortable with. The agent best understands the needs of their clients. The agent-client relationship remains intact. Therefore, the agents don’t have to worry about being cut out of the loop.
- Captive Resources (CRI): CRI also assists agents in educating their clients on captives. Members of every captive they consult are represented by an agent that places their insurance policies.
2. Captives of Different Sizes
The size of the captive group can impact the level of control and transparency by the business owner and agent.
- Captive Coalition: The Captive Coalition model emphasizes smaller groups, having a maximum of 50 members per captive. This setup allows for closer collaboration, increased transparency, and easier communication between members. This can help agents and business owners stay informed about risk-sharing arrangements. However, some business owners might feel the risk-sharing pool is limited.
- Captive Resources (CRI): CRI often works with groups that have over 200 members. Larger groups might appeal to businesses with broader risk sharing as the risk will be spread across more participants. Some agents may find that a larger pool can reduce individual visibility into the specifics of risk-sharing and decision-making processes.
3. Flexibility in Risk Management
Captive insurance is all about risk management. It’s important in any insurance setup. The flexibility of each captive structure can make a huge difference for business owners and independent agents.
- Captive Coalition: Many structures are offered, including single-parent captives, group captives, and cell captives. This allows businesses and their agents to have a variety of risk management strategies to cover multiple lines of business, such as workers’ compensation, general liability, and specialized coverages like property, medical stop loss, and professional liability. The flexibility can benefit businesses with diverse risk portfolios.
- Captive Resources (CRI): CRI focuses primarily on group captives and requires participants to include workers’ compensation as part of the coverage offered. While some might feel it doesn’t offer options for additional lines of coverage, it can still be a great solution for businesses seeking a more straightforward approach to risk sharing.
4. Onshore vs. Offshore Captive Insurers
The location of a captive can affect regulatory requirements, ease of management, and the overall comfort level of business owners.
- Captive Coalition: All of the captives with Captive Coalition are U.S.-based, which simplifies the management process for independent agents and business owners. Being able to show that money stays within U.S. banks often reassures clients who are wary of perceptions associated with offshore accounts. And the board of directors meetings don’t need to be outside of the U.S.
- Captive Resources (CRI): CRI primarily operates offshore captives in locations like the Cayman Islands. This isn’t necessarily a negative by any means. Offshore captives are common and well-established practices in the industry, offering certain regulatory and tax benefits that can appeal to businesses seeking to optimize their insurance structures. These jurisdictions are experienced in managing captives and provide a stable legal framework for such entities.
Plus, with captive owners having to meet up annually, a vacation to the Cayman Islands can be seen as an additional benefit.
5. Educational Support and Transparency
Captive insurance can be intimidating, especially for independent agents new to the concept. Both Captive Coalition and CRI offer educational resources. However, there are notable differences in how the resources are delivered.
- Captive Coalition: The sole purpose of Captive Coalition is to educate independent agents to make captive insurance a digestible concept. Independent agents are provided extensive training on captives through programs like our 30-day Quick Start. Additionally, joint training is offered to agents and business owners, letting agents learn firsthand what their clients will learn.
Other resources include the Captive Assessment tool and Captive Insurance Calculator. Each tool allows an independent agent to check if their client qualifies for a captive insurer and see potential cost savings. - Captive Resources (CRI): CRI also offers material and training to help agents understand captives. Some agents find these resources helpful, while others have expressed a desire for more interactive or in-depth training. As with any educational program, its effectiveness can depend on individual learning styles and the specific needs of the independent agent and their client.
Which Captive Insurance Provider Works Best For Your Client?
Captive Coalition and Captive Resources provide solutions for businesses looking to take control of their risk management through captive insurance. However, the differences in size, transparency, flexibility, and agent involvement are factors for independent agents to consider.
Before making a choice between Captive Coalition and Captive Resources, you’ll want first to know how to identify which clients are best for captive insurance. That way, you can see which client best fits a captive and determine the best route for them.
If you have any other questions or want to schedule a consultation, click the button below to speak with one of Captive Coalition’s captive consultants.
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