Captive insurance programs can be beneficial to employers in both ‘hard’ and ‘soft’ insurance markets. A captive is simply a financial vehicle that allows an employer to pay its actual costs and not a market price. A captive therefore makes sense anytime insurance carriers are charging a large profit component in addition to covering their costs.
The question when deciding whether or not to pursue a captive shouldn’t be:
“Are rates increasing?”
It should be:
“What is the market charging for insurance and what is the actual cost?”
If there is a discrepancy between the market price and actual cost, an employer may be paying too much and a captive insurance program could be the solution.
Garnet Captive can help employers further reduce actual costs by providing results-based loss control and aggressive claims adjusting.