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Captive Insurance: Pros & Cons

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InCite Performance Group

on 25 May 2018

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Transcript of Captive Insurance: Pros & Cons

Captive Insurance: Pros & Cons
To the Surety Underwriting Process











Where Do We Begin?
What is the genesis of insurance?
But there were rules to be involved...
All about the management of risk!
Creating an
Insurance Company
Operating
Company

PREMIUMS
Policies, risk transfer,
claims handling, loss control,
actuarial guidance, etc.
Shares of Stock Ownership Examples:

Individuals
Corporations/Operating Co.
Trust
Key Employees
Two Primary Types of Captives
831(a) Election
831(b) Election
"Traditional" Risk Types:
Workers Comp
General Liability
Professional Liability
Auto
Employee Benefits
Property
E&O
Builders Risk
Bonding
Pollution/Environmental
Etc.....

60/40 Principle
40% toward expenses
60% toward claims
$1.2 MM in Actuarially Supported
Premium...PATH Act 2015


"Non-Traditional" Risk Types:
Accounts Receivable
Deductibles
Intellectual Property
Supply Chain
Warranty Work
Contingent Partner Disruption
Differences in Conditions
Crisis Management/Reputation


60/40 Does Not Apply...
Average cost of $50-75k
So What Does It All Mean for Bonding?



The impact of revenue leaving the operating company's financials...



Companies seeking to bond themselves on smaller jobs, but seeing a bigger opportunity without knowing the larger risk.



Carrier partnerships are key to success...
Full transcript