Captive coverage. Shared success.
Group captive insurance is a distinctive insurance program in which multiple businesses unite to form their own insurance company. Each involved business becomes a member-owner (also known as an owner-stakeholder) in the captive insurance company.
A captive insurance company operates like a traditional mutually-owned insurance company, having A-rated carriers that issue policies, process claims and follow applicable regulations.
There are generally two kinds of group captives: homogenous or heterogenous. In a homogenous group captive, members all operate within the same industry. For this reason, a homogenous captive group that is sponsored by an industry association may be known as an “association captive.” A heterogenous group captive’s members come from a variety of industries, which often allows them to diversify their collective risks.
To design a group captive program for your business, we start with an actuarial analysis of your current program. If your company qualifies, we’ll match you with other businesses.
Once your captive 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 help pay for claims.
With Higginbotham’s help, Zoeller Pump Company transitioned to a group captive insurance plan and optimized its risk management strategies. Learn how Higginbotham played a pivotal role in demystifying the concept of captives and setting up this innovative model.
Understanding captive insurance can be challenging, but our team works to simplify the process for you.
Group captive insurance is more than just a way to get insurance coverage; it’s a path toward managing your risks and your insurance needs alongside other like-minded businesses.
At Higginbotham, we’ll guide you through the details of group captive insurance, helping analyze your risks, match you with like-minded businesses and secure the commercial coverage you need.
To learn more about how our values-based approach drives value for your business, click here.
Unlike traditional insurance, a group captive allows its member companies to have greater control over their insurance costs, coverage and claims management. Here’s a breakdown of how a group captive operates:
A group captive is essentially an insurance company owned by a collection of organizations rather than a single entity. This collective ownership model fosters a community of like-minded companies striving toward mutual risk management goals.
Through shared risk and collective purchasing power, group captives tend to offer a more predictable cost structure than traditional insurance. And, by minimizing claims and remaining membership for several years, businesses may qualify for dividend distributions from profits, which can help reduce their total cost of coverage.
Each group member’s premium is based on its own loss experience instead of industry rate pricing, allowing for a more customized insurance program that accounts for your company’s risk management and loss control strategies, claims history and overall operations.
Companies within a group captive share risks, which often translates to lower premiums since the overall level of risk is distributed among all members.
Group captive members can tailor their coverage to meet the unique needs and risk profiles of their respective businesses.
The group captive is governed by its member businesses, meaning that decisions can better align with the best interests of the group, rather than the goals of external stakeholders.
Captive insurance is an alternative financing technique that has the potential to benefit mid-size to large companies by rewarding their loss ratio performance with a reduction in annual premiums. Learn more about how group captives and loss control intersect in this short video.
If you’re interested in securing group captive insurance for your organization, but don’t know where to start, Higginbotham is here to help. We get to know the risks and priorities of your business, allowing us to align your group captive insurance coverages and risk management strategy with your business’s needs.
Each form of insurance within your captive program can help build an overall solution for a group captive. While the eligible commercial coverages for your captive group will depend on several factors, common policy options include:
Help safeguard the backbone of your organization – your employees – with workers’ compensation insurance within a group captive. This coverage can assist your business with the financial repercussions of employee injuries or illnesses incurred while on the job.
Navigate the turbulence of liability claims with commercial general liability insurance. This coverage can assist with claims of bodily injury, property damage and other covered perils that can arise during business operations.
The road to success is smoother with commercial auto insurance. Within a group captive, auto insurance can help cover claims arising from accidents involving vehicles owned or operated by your company.
Secure your assets against the unforeseen calamities that may befall them. Physical damage insurance within a group captive covers the cost of repairing or replacing your company’s property following events like fire, theft or natural disasters.
In the bustling marketplace, product liability insurance helps to shield your business from claims of harm caused by your products and to reduce the financial burden of such claims.
Medical captive insurance can provide a specialized solution for managing risks that are unique to the health care industry. By participating in a medical captive group, health care providers can pool their resources, integrate risk management into their overall business strategies and obtain industry-specific coverages like medical malpractice insurance, which helps cover legal costs, settlements or awards in cases of alleged professional negligence.
Based out of Bossier City, Louisiana, Mike Knotts opened his own insurance agency in 1996, growing his business into a 20-person team of commercial insurance and employee benefits professionals offering specialty group captive services.
After his insurance agency partnered with Higginbotham, Mike became a managing director and a specialty practice leader for Higginbotham’s group captive insurance program.
Mike specializes in managing group captive programs with an emphasis on group captives within the transportation industry. He holds a Bachelor of Science in Marketing and Business Administration from Northwestern State University in Natchitoches, Louisiana.
Along with serving as a group captive practice leader, Thomas is a managing director based out of Higginbotham’s office in Louisville, Kentucky. He manages insurance programs for commercial and municipal organizations of various sizes and industries, including heavy manufacturing, technology, life sciences, construction, education and human services.
He specializes in workers’ compensation and risk management, along with alternative loss funding mechanisms for medium to large corporations, including captives, large deductibles and qualified self-insurance.
Thomas holds the insurance industry’s highest designation, the CPCU (Chartered Property Casualty Underwriter), and is a Licensed Consultant in the state of Kentucky.
Along with his experience in the captive insurance landscape, Christopher is a licensed health, property and casualty insurance agent in the states of Arkansas, Louisiana, Mississippi and Texas. He also holds a Certified Insurance Counselor (CIC) designation and is a Transportation Risk Specialist (TRS).
He holds a Bachelor of Business Administration in finance from Louisiana State University in Shreveport and a master’s degree in secondary education from Northwestern State University.
Discover a world where insurance isn’t just a requirement, but a tool for financial growth.
Get in touch with our team at Higginbotham, and let us help create a captive insurance strategy that contributes to your business’s success.