We have been busy at an unprecedented rate due to the economic reality of the Covid 19 Virus. While insurance carriers are making a public display of “goodwill” by offering Auto Policy rebates, the reality is they are about to crush the consumer. The industry is reeling from missed projections and underwriting recalculations. This will likely manifest itself in non-renewals and unheard-of increases in pricing. We have already seen many renewals for commercial accounts with increases in property, casualty and liability insurance premiums from 20-40%.
In short: The carriers are looking at their books of business and saying: “keep the really good accounts, get rid of the rest”. This is a significant reason to review Captive Insurance. While Captive insurance does not necessarily decrease premiums, it does keep 50-80% of those premiums on your balance sheet. If your agent and/or carrier is not discussing this with you - Ask yourself why not? - They likely do not want to be the bearer of bad news! This “hardening” of the Market presents us with new challenges - But as an insurance consumer myself, I understand this can be daunting if you do not have leadership and guidance.
We are strongly encouraging our clients to, at a minimum, review their current policies, whether that is with us through a Captive Model, complimentary review with one of our affiliates, or your current agent/carrier. We feel a fiduciary obligation to make our connections and current clients aware of this, and so should your current carrier and/or insurance provider.
You can view our previously recorded webinar over captive insurance below. I have included the high-level eligibility guidelines and benefits below as well.
- Creates an insurance company to accept some of a business’s risk
- Keep a significant amount of your current insurance premiums in a company that you own
- Create a more cost-effective way to cover the need of commercial insurance
- Gives the business owner the ability to re-invest insurance premiums
- Creates another estate planning vehicle that offers the same asset protection as a business
- Enables a business to manage its insurance risks more effectively
- Gives the business the ability to insure risks that most commercial insurance companies won’t, such as; loss of a key contract, business income protection, regulatory change, key supplier and/or accounts receivable.
General Business Eligibility Guidelines:
- Generating at least $10,000,000 a year in revenue
- Currently paying $250,000 a year or more in insurance premiums
If you have any questions, comments, or concerns regarding Captive Insurance you can always reach out to our office here or reach me directly at the contact info listed below.
Founder, Managing Partner
Finance For Thought