We all know that we're in a hard insurance market. The news is filled with information about insurance rate hikes and lack of coverage availability.

The facts are indisputable, but I think it is important to point out that a solution does exist which should be of particular interest to middle market companies. That solution is a group captive.

And the results that we've achieved with our group captives demonstrate how they can counteract the kinds of rate increases we are seeing in the traditional insurance marketplace.

How? I have 5 good reasons for you.

  1. Group Captives excel in a hard market because the premiums are based on the insured's own losses rather than the insurance carriers' performance.
  2. Artex Group Captives have delivered excellent renewal results in the 2nd and 3rd quarters of this year for our customers, in contrast with the results reported by insurers. For example, WC premium decreased by 5.41% on average, and GL decreased by 2.35%, while Auto increased slightly (2.62%).Although our Group Captive auto premiums did go up slightly, it should be noted that 55% of Artex group captive members saw a flat renewal or a decrease in their auto premium. Because our Group Captive premiums are developed based on historical losses, the vast majority of those 45% that did receive an increase still ended up paying overall premiums that were below current insurance market rates.
  3. Purchasing power. Group Captive members come together, taking risk and working in partnership with fronting carriers to develop premiums and programs that work for all parties. This same purchasing power comes into play when negotiating with service providers, something that middle-market companies don't have the leverage to achieve on their own. Being part of a larger group provides the group purchasing power to keep rates as competitive as possible.
  4. Information sharing. Never underestimate the value that comes from pooling knowledge. Our group captives share best practices and look for ways to lower claims to reduce losses over time.
  5. The ability to return unused premium to the membership. This year Artex has returned an average 12% of premiums to members. So even when they are being charged less in premiums up front, many of our clients are also getting unused premiums back during this difficult time.

If you haven't considered alternative risk solutions in the past, now is the time to learn how you can help your company succeed by lowering risk management costs.

Author Information

Chad Kunkel
Chad Kunkel
Executive Vice President Group Captives