Change the course of risk.
Artex has long been at the forefront of providing a diverse range of captive solutions, including Group Captives, to a broad spectrum of industry sectors. We currently manage several different Group Captive programs – each open to new members – that have been designed specifically to meet the needs of mid-market employers looking for an alternative risk transfer solution but without the funding options that larger corporations have. Many of our programs were established more than a decade ago and have performed well consistently during a soft market and have excelled during hard market conditions.
What Is a Group Captive?
A Group Captive is an insurance company owned and operated by captive members, strictly for the benefit of those members. It enables middle-market employers to increase their underwriting credibility through the benefits of collective purchasing power. Group Captives are empowered with the control to select service providers, determine coverage levels, manage losses, direct the use of surplus and, ultimately, share in the results – ideally generating bottom-line profit. Leveraging this combined strength helps medium-sized firms strike a balance between risk retention and transfer to reduce those costs and promote long-term stability between insured group members and underwriters.
Coverages provided by a Group Captive typically include workers compensation, general liability, automobile liability (owned and non-owned) and automobile physical damage insurance. In addition, since the implementation of the Affordable Care Act (ACA), there has been an increased use of Group Captives among mid-size employers to provide medical stop-loss coverage for healthcare plans.
Advantages of a Group Captive: United We Stand
- Lower overall insurance spending as premiums are based on personal history and not on market trends and traditional insurance costs
- More comprehensive and responsive coverage
- Reduced impact of insurance market volatility
- Enhanced risk control capabilities
- Increased control over claims management
- Minimized risks through heightened safety awareness and emphasis
- Economies of scale when purchasing reinsurance
Types of Group Captives
Group Captives can be set up as heterogeneous or homogeneous programs. A heterogeneous captive insures a group of unrelated companies representing different industries. It encourages strong growth through risk diversification. A homogeneous captive is an entity owned by a number of companies in the same industry or association, with similar insurance needs. It may also be called an association or industry captive.
Captives are not a good fit for everyone, though. The right candidate will qualify based on the company’s premium size, risk exposure, financial stability and senior management’s commitment to safety and loss control. Our experienced team at Artex can assist agents and brokers in assessing the viability of a Group Captive solution for clients.