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Captive Insurance

Creative risk management solutions for unique organizations.

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Spotlight on: Captive Insurance

Your great loss ratio could help lower your insurance costs.

Whether you operate a business in a market with limited insurance carrier options or just want to explore alternative options to your guaranteed cost insurance, captive insurance may be an option you want to consider.

Captive insurance is an alternative risk financing technique that rewards mid- to large-sized companies with competitive loss ratios.

If your organization has a great safety record, stellar loss control measures and solid financials, you could be a good fit for a captive program.

Group Captive Insurance

A group captive is an insurance company owned by and designed for its members.

Group captives are formed either homogeneously (all member-owners from the same industry) or heterogeneously (member-owners from different industries).

If it’s a good fit for your situation, a group captive can offer several benefits to your business, including increased control over:

  • The Underwriting Process
  • Risk Management
  • Loss Control
  • Operations

While not always the case, owner-stakeholders who minimize claims and maintain membership for three years may also qualify for dividend distributions from profits to help reduce their total cost of coverage.

How does group captive insurance work?

A captive insurance company operates like a traditional mutually-owned insurance company, having A-rated carriers that issue policies, process claims and follow all applicable regulations.

To design a captive program for your business, we start with an actuarial analysis of your current program. If your company qualifies, we match you with other businesses.

Once your group is formed, around 35 percent of each premium dollar paid will fund operational costs, with the remaining 65 percent going to a loss fund designed to pay for claims.

Each group member’s premium is based on its own loss experience.

Which coverages are eligible for a group captive?

While the eligible coverages for your captive group will depend on several factors, some of the more common examples of eligible coverages include:

  • General Liability
  • Physical Damage
  • Auto Liability
  • Product Liability
  • Workers’ Compensation
  • Medical Malpractice

Every captive is different, and not all coverages will work for all captives. With this in mind, we recommend discussing your needs with a seasoned captive insurance specialist.

The Higginbotham Difference: Custom Solutions Built Around Your Needs

At Higginbotham, we start with listening and end with custom insurance and risk management strategies tailored to your needs.

Employee owned and customer inspired, we put you at the center of everything we do. That’s why our approach to finding solutions comes with humanity—and without compromise.

By using our independence to commit to transparency and demonstrate authenticity, we’re a company that leads with values so value leads.

To learn more about how our values-based approach creates value for you and your business, click here.

Or visit our Insights page to learn more about different insurance coverages.

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Talk to a Seasoned Group Captive Specialist

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Single Parent Captives

A single parent captive, or “pure captive,” may be owned, financed and controlled by a single parent company and designed to insure that parent company and its affiliates’ risks.

Options for ownership of the insurance company can provide meaningful planning opportunities with potentially significant economic benefits. A single parent captive uses risk capital and premium payments provided by the parent to cover claims and administrative costs.

Operating as an insurer for the parent company, these captives can be structured to handle many types of coverage. In many cases, there are opportunities to attain cost savings on traditional commercial insurance coverage, cover deductibles, as well as cover risks for which there is no efficient commercial insurance market.

Much like traditional guaranteed cost insurance, a pure captive pays losses for claims to the parent company.

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Is a single parent captive right for me?

Higginbotham’s captive team will provide a no-cost analysis of your specific situation to determine whether or not a single parent captive option makes sense for your business to consider.

Once the decision is made to move forward, the experienced Higginbotham team manages all services necessary to maintain compliance with insurance regulations. Such services may include:

  • Preparation and filing of all documents required for the formation and approval of the insurance company.
  • Coordinating all actuarial services required for formation, reserve analysis and regulatory reporting.
  • Managing the maintenance of the books and records of the insurance company.
  • Arranging for the preparation of the federal income tax return for the insurance company.
  • Filing of all reports with insurance regulators to maintain compliance under applicable laws.
  • HIG Captive Insurance Group, LLC becomes your partner in handling all aspects of forming and managing your captive insurance company.

Risk management and mitigation, together with economic benefits, make for a powerful combination for many business owners to consider.

Risk Management Services

At Higginbotham, we take a consultative approach to customer service and risk management.

Whether you have a single policy, a commercial package or many insurance policies covering multiple locations and risks, we take the time to understand your unique needs so we deliver the best coverage at the best price available.

But we don’t stop there.

Our work continues 365 days a year. We have a Day Two Services® team that works in tandem with our risk management specialists to deliver year-round value.

From help with compliance to safety audits and claims advocacy, our Day Two Services® team helps you mitigate risks, avoid costly claims and better position your operations so you can focus on what matters most: growing your business.

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Work with a captive insurance professional who specializes in creative solutions.

A great plan starts with a conversation. Let’s talk about what you need.

Talk to a Captive Insurance Specialist

Request a Quote