Our Promise To Independent Agents
Our number one goal is to make sure you're confident in presenting captive insurance to your best and largest clients.
Helping You Offer Captive Insurance with Confidence
Captive insurance is a powerful tool that can help you retain your biggest clients by offering them significant benefits, like greater control over insurance costs, improved financial stability, and a more customized approach to risk management. Understanding captive insurance can be challenging, and presenting a solution you’re not fully comfortable with is not easy.
At Captive Coalition, we’re here to change that by supporting you every step of the way, ensuring you have the confidence to have those crucial conversations about captives and keep your most important clients engaged.
As an independent insurance agent, you need the right resources to confidently offer captive insurance solutions. Captive Coalition provides you with the education, tools, and support to help you and your clients gain greater control over insurance costs and improve financial stability.
How We Help You:
- Educate: We offer multiple ways to increase your knowledge:
- Join our interactive weekly office hours for real-time learning and discussion.
- Participate in our monthly educational webinars to deepen your understanding.
- Explore our Learning Center for in-depth, self-paced resources.
- Set up a call with Warren for personalized guidance.
- Assess:
- Want to see if your client is a right fit for a captive? Use our online assessment tool.
- Need a pricing estimate for your client? Use our online pricing calculator.
- Support: From initial consultation to implementation, we’re with you every step of the way, ensuring a smooth and successful experience.
The Result:
By partnering with Captive Coalition, you can enhance your client relationships, offering them solutions that provide more control, transparency, and long-term financial benefits. Together, we’ll ensure that your clients are not only protected but also positioned for success.
FAQs
Answers to common questions about captive insurance programs
What is Captive Insurance?
Captive insurance is a strategy in which a business sets up its own insurance company to insure its risks rather than relying on traditional insurers. This means the company controls its insurance costs and has a better handle on managing risks. Most clients don't know about captives because they're not widely discussed, but they can be a great solution for businesses looking for more control over their insurance expenses.
How do captives help businesses save money?
Captives give businesses a chance to save money by keeping any profits from insurance that would normally go to a traditional insurer. They can invest the premiums, which can lead to additional savings. Plus, they get to manage their risks more closely, which often results in fewer claims and lower overall costs. Many clients are unaware of how much control they could gain by exploring this option.
Who should consider a captive?
Businesses that are proactive about managing risks and are frustrated with rising insurance costs are prime candidates for a captive. Companies spending a significant amount on premiums but not seeing equivalent benefits should consider it. It’s your role to identify these clients and help them understand how captives can be a game-changer for their bottom line.
What types of captives are available?
There are different types of captives such as single-parent captives (one company creates its own insurance), group captives (multiple companies pool together), and cell captives (a structure that allows multiple entities to have their own space within a larger framework). Each option has its own benefits, and it’s important to guide your clients to the right type based on their specific needs and risk profile.
What happens if a business wants to exit a captive?
Exiting a captive isn’t as simple as just walking away. If a client wants out, they can leave right away, but their funds will stay in the captive until all the policy years are closed—this could take five to seven years. It’s crucial to make sure they understand this and plan accordingly. Helping clients understand the long-term commitment of captives is key to ensuring they are fully informed before entering one.
What are the differences between captive and traditional insurance?
Captive insurance stands out from traditional insurance in several important ways:
- Custom Premiums: In a captive, the premiums are based on your client’s actual loss history, not on market trends or the overall performance of the insurance company. This setup rewards companies that effectively manage their risks.
- More Control: Your clients have much greater control over how their insurance program is run, including decisions on underwriting and claims management.
- Profit Potential: If your client’s business experiences fewer claims, they can potentially profit through lower premiums and the return of unused funds.
What does it cost to join a captive?
The cost of joining a captive depends on the type of setup. A Single-Parent Captive typically requires at least $1 million in premiums. Whereas a Group Captive usually needs a minimum of $250,000 in combined premiums for coverage like workers’ compensation, general liability, and auto liability. Besides premiums, there are other costs like collateral and purchasing a share in the captive. While the initial costs are like traditional insurance, businesses often see about a 30% reduction in premiums within three to five years, thanks to better risk management.
Would a business go bankrupt from a large claim in a Captive?
No, large claims won’t bankrupt your business in a group captive. Group captives spread out the risks among different businesses, and a fronting carrier often steps in to cover significant claims. For example, if a $1 million claim arises, the captive might cover the first $300,000, with the fronting carrier handling the rest. This system ensures that no single business bears the entire financial impact of a large claim.
Are there tax benefits in a captive?
There are tax benefits to joining a captive, such as being able to deduct premium payments on federal taxes. However, it’s important not to join a captive just for the tax perks. The IRS closely monitors certain captives, like the 831(b) micro-captive, which could lead to additional scrutiny. While there are legitimate tax advantages, they should be viewed as a bonus rather than the main reason to join a captive. It’s crucial to stay within IRS guidelines to avoid any potential issues.