If your company places safety as a top priority, you likely have better than average loss experience. Perhaps your insurance premiums have historically exceeded your losses. But, why aren’t you rewarded for your risk management and great loss history? Why are your insurance rates judged by your industry as a whole?
How can I take control back from the insurance company?
To gain ownership and control of your insurance program, the first step is the paradigm shift from being a consumer of insurance in the traditional market to an owner of your own insurance company. This is made possible through group captive insurance. Group captives provide stability and control through ownership. It’s similar to your deal operations in that your insurance program can also become a profit center.
Am I an ideal candidate for a captive?
Group captives seek to grow membership with best-in-class companies with these characteristics:
- Leadership and decision makers have an entrepreneurial spirit
- Company has a strong safety culture backed by management committed to risk management
- Organization is financially stable
- Better than average loss experience with a history of insurance premiums exceeding losses
- Current insurance premiums for Workers’ Compensation, General Liability and Automobile are in excess of $150,000. (Coverage for Garage operations may also be available)
What are the benefits of a group captive?
- Being in a group captive means being in control of your insurance
In a group captive, your company can achieve long-term control of your insurance program and costs. This is due to your captive premium being actuarially based on your own loss experience, not that of your industry.
- Insulation from the cyclical trends in the standard market
Through unbundling of administration, claims, loss control, reinsurance and more, you are able to isolate and drive down the cost of insurance.
- Retention of underwriting profits.
100% of unused loss funds plus investment income is returned to you in the form of dividends.
- Organically strengthen safety culture
Because premiums are based on your own loss history, there is a major incentive to prevent injuries and accidents. This creates a naturally heightened awareness, interest and engagement in safety programs, risk mitigation policies and procedures.
- Access to other best-in-class leaders
Every captive hosts risk control meetings and board meetings. These are opportunities to learn from other members through the sharing of ideas and best practices.
- Risk Control Assessments
Group captive members receive company-specific loss control and risk management programs. This is a result of an in-depth RCA.
- Transparency in claims handling
A third-party claims administrator provides dedicated claim adjustors, as well as access to online claims data.
- Investment opportunity
Group captive members have an investment opportunity in a captive investor’s fund in excess of $4 billion.
- Exceptional underwriters
Captives are underwritten by an A+ rated insurance carrier.
- Full view of program costs
As an owner of a group captive, you have the complete transparency of all program costs. The amount you pay for policy issuance, reinsurance, loss control/claim services and broker fees are all disclosed up front.
- Flexible structure
The captive structure still allows the member to deduct their insurance premium as they would have in the standard market.
- Only best-in-class companies can join a group captive
Prospective members must go through a risk assessment, financial review and underwriting review o ensure they meet the standards of the captive program. Membership is reserved for companies that demonstrate the highest controls for safety and claims management.
- Confidentiality
All captive company business is conducted through a confidential member number. All membership information is kept private.
- Equality
All members are equal owners of the captive, despite number of employees in their workforce, the price of their insurance premiums, how their sales numbers looked in a particular quarter, or any other reason. Each member has an equal say and voting power.
- No handcuff clauses
A captive member can leave at any time.
- No exploratory costs
There are no costs associated with exploring the benefits of a member-owned group captive.
Can I just pick any insurance broker for a group captive?
Best-in-class companies tend to use best practices, the latest technology, hire the smartest employees, and they don’t cut corners when it comes to excellence. Why would a business leader just select an insurance broker at random? It’s important to work with an insurance broker with experience working with group captive members as their advisor and advocate.
Valley Forge Captive Advisors has more than 20 years of experience in the member-owned group captive business. They have nearly 200 captive clients with access to more than 20 different captive programs to ensure a best fit. We assist prospective members through the entire process including preparing for the captive risk control assessment, the submission process and the transition/onboarding to a captive insurance program. We assist and collaborate with members in the claims handling process, insurance coverage placement and exposure review, as well as a captive equity analysis. Due to our service model, VFCA year-after-year sees a 98% client retention rate.
When it comes to truck dealers specifically, VFCA has broad experience and numerous insurance company appointments to facilitate the placement of ancillary lines of coverage that are critical to your dealership operations. These include:
- Property
- Inventory & Business Income Exposures
- Dealer Open Lot
- Garagekeepers Liability
- Management Liability Insurance (including Directors & Officers, Employment Practices Liability, Fiduciary Liability and Crime)
- Network Privacy & Security Liability (Cyber)
- Pollution Liability
- Employee Benefits