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Captive Insurance: Solutions to Commercial Market Challenges

Captive insurance is a resolution to challenges faced by businesses in commercial markets, such as reduced coverage and increased premiums due to natural disasters, cyber-attacks, and limited access to reinsurance markets. Captives provide the ability to adjust insurance coverage according to changing circumstances—offering flexibility and control—with plans suitable for a variety of industries, including manufacturing, distribution, construction, trucking, transportation, retail, food and beverage production, hospitality, healthcare services, and many others.

Without a Captive Program, You Could Be a Prisoner to the Markets

As business owners, we know how important it is to be aware of the challenges that your company may face. Without a captive insurance program in place, your organization could be at risk of limited coverage, increased premiums, and vulnerability to the disasters discussed above. By not considering a captive strategy, you may have limited control over your insurance coverage, leaving you exposed to changing conditions.

The COVID-19 pandemic highlighted the importance of understanding and implementing captive solutions, as it exposed businesses to unforeseen risks. Relying solely on traditional commercial insurance may lead to limited transparency and control over premiums, costs, and claims. Without a captive option, you may lack the necessary flexibility to adapt to changing conditions and to mitigate daily risks faced by your business, leaving your company financially vulnerable.

Achieving Financial Stability and Breaking Free from Market Control

You understand the importance of mitigating risks to your business’s success. Traditional insurance policies may not offer the elasticity and control necessary to adapt to changing conditions. However, adopting a captive insurance strategy can offer a solution to overcome these challenges and help mitigate specific exposure.

An 831(b) captive program, specifically, is designed to complement your business by bringing efficiencies and limiting disruptions. At iCOR, we will work with your senior financial representatives to ensure we achieve your risk-mitigation goals. The plan will be tailored to meet your specific risk management and financial needs, giving you increased control. Captive program members will enjoy benefits such as dividends, increased transparency, and enhanced control over claims.

These policies may reduce operating costs incurred by traditional insurers, thanks to efficiencies gained through the unbundling of services and group purchasing power. Additionally, members' unused loss funds and accrued investment income are returned in the form of dividends, further strengthening your balance sheet. Furthermore, an 831(b) strategy also allows business owners to defer income to address potential risks tomorrow, utilizing tax-deferred reserves to navigate through today’s storm.

By adopting an 831(b) captive strategy, you can enjoy greater financial stability, mitigate hazards, and provide a competitive advantage for your business. If you would like to discuss these options in further detail, please make sure to reach out, and also, don’t forget to check out next week’s podcast, where our team will delve deeper into captive plans and show how they will work for you and your company.

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