Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

The property and casualty market over the last decade has been what we consider “soft.” Overall, insurance premiums have remained relatively flat, or in the case of workers’ compensation rates have decreased considerably. However, we are seeing significant pricing pressure in commercial auto. In the next few years we expect to see the same pressure in workers compensation. One alternative risk financing strategy that you may want to consider before the coming hard market is a “Member-Owned Group Captive.”

A member-owned Group Captive is an insurance company owned and operated by captive members, strictly for the benefit of those members. This structure enables middle market companies the ability to increase their underwriting credibility through the collective purchasing power of the group. These groups can be related or homogeneous, like a trade group or association, or unrelated/heterogeneous which could be companies similar in size.

Advantages of a Group Captive

• Lower Insurance Premiums over time

• Financial Incentives for strong Loss Control

• Increased control over claims management

• Long term control of your Insurance Pricing

• Investment Income

Who should consider a Group Captive?

• Companies that have shown long term financial strength.

• Owners who are committed to safety and have strong safety programs in place.

• Loss histories that are significantly better than average in their respective industries.

• Annual insurance premiums of $150k or more for workers compensation, general liability, and commercial auto.

• Businesses that are seeking long term control over their risk financing costs.

To learn more about Captives, register for our workshop held on April 16, 2019 from 9:00 a.m. to 11:00 a.m. at the Boys & Girls Club of East County administrative offices in Santee, CA. Doug Hayden from Captive Resources, LLC will provide an informational presentation about Captives and if it is the right fit for your business.

For other insurance-related questions, please contact Rancho Mesa Insurance Services at
(619) 937-0164.