Captives have become popular because of the significant revenue that can be generated for an organization. According to the National Association of Insurance Commissioners (NAIC) and AM Best, there are over 7,000 captives globally. This growth has created an increasingly large market of potential partners for handling resident required insurance coverage, particularly in the renters insurance space.
With all of this choice, when considering a potential captive option it is important to understand that with great reward can come significant risk and not all captive options are the same, leaving property managers and owners with a choice to make: Go the traditional route in using third-party insurance carriers to alleviate the pains of managing all aspects of policies and accounts OR use less traditional means by eliminating some or all of the third-party providers to potentially profit from underwriting risk OR implement a combination of both the traditional and less traditional.
While ePremium® Insurance Agency is known for our insurance coverages for the multifamily industry, we think it’s time we introduced our capacity for captive solutions. Read up on our Complete Support Solutions: ePremium® Insurance Agency Creates a Captive Insurance Program case study to learn how we can assist those considering moving to a captive model:
Captive Assessment
Still on the fence about whether you’re a good fit for a Captive insurance model? We’ve gathered the following list of key assessments you’ll want to make when considering the switch:
Feasibility Study: This should be your starting point. It involves an in-depth analysis of your company’s risks, loss history, and specific coverage gaps. The study should quantify potential claims scenarios and required capital reserves, helping determine if a captive model is a viable option.
Risk Assessment: Evaluate the specific risks your company faces and how a captive insurance program can address these risks more effectively than traditional insurance. This includes analyzing your loss history, exploring risk mitigation strategies and identifying any uninsured or underinsured risks.
Financial Analysis: Compare the costs of a captive insurance program with traditional insurance. This includes evaluating potential cost savings, tax implications, and the financial stability of the captive insurance company.
Domicile Selection: Choose the right domicile (location) for your captive insurance company. Factors to consider include regulatory environment, premium, self-procurement and income tax implications, and administrative flexibility. US jurisdictions like Vermont, Utah, and South Carolina are popular.
Program Structure: Consider the structure of your captive insurance program, including policy design, coverage limits, and claims handling. This step ensures that the program fits your company’s specific needs.
Read through our case study to learn more!
ePremium Insurance Agency, LLC, a limited liability company organized under the laws of Ohio, is a licensed insurance producer in all states, except Alaska with its principal place of operation at 4770 Duke Drive, Suite 200, Mason, OH 45040 (NPN 9925625, California License No.: 0G66570, Texas License No.: 1549460). ePremium Insurance Agency, LLC does business under the following names: in NY dba – ePremium Insurance Agency LLC; in FL dba – ePremium Insurance Agency, LLC; in CA dba – ePremium IRIS Insurance Solutions, LLC.