Skip to content
Search icon

Group Captive Insurance

What is a Group Captive?

Group Captive Insurance refers to an arrangement where multiple organizations come together to form their own insurance company, or a ‘captive’, to finance their collective risks. Unlike traditional insurance, where premiums are paid to an external insurer, in a group captive, the member organizations pool their resources to pay for their own losses.

There are several types of group captives, including heterogeneous and homogeneous captives, risk retention groups, agency captives, association captives, and industry captives. The specifics of the captive will depend on the shared needs, risks, and objectives of the member organizations.

What Specific Insurance are they set up to Cover?

Group Captives are usually set up in a hard market, to cover a wide range of risks. The specifics will depend on the needs of the member organizations. For healthcare and senior living facilities, group captives could cover professional liability, general liability, property damage, workers’ compensation, and even specific risks not typically covered by conventional insurance providers.

Get a Quote Now

What Kind of Organizations is Group Captive Insurance Suited To?

Group Captive Insurance is particularly suited to organizations with a significant cost of insurance and a willingness to assume a portion of their own risk. It’s an attractive option for healthcare and senior living facilities that face diverse and substantial risks and can benefit from the flexibility and potential cost savings that a group captive can provide. It’s ideal for those that have effective risk management strategies and are committed to reducing their risks over time.

What are the Advantages of Group Captive Insurance?

  • Cost Savings: By forming a captive, member organizations can pool their resources to save on insurance costs. These organizations often see lower costs as they cut out the middleman of traditional insurance providers., As they are member-owned entities, group captives canreturn unused premiums and investment income back to members.
  • Enhanced Risk Management: These organizations take an active role in managing their risks. This heightened engagement can lead to improved risk management practices. Member organizations typically shift focus from what risk management programs cost to the savings they can generate, fostering a proactive risk management culture.
  • Greater Control and Flexibility: Group Captives give member organizations with more control and flexibility over their insurance programs. Members can tailor coverage to their specific needs and quickly adapt to changing risk landscapes.
  • Continuity in Programs Premiums: Traditional Insurance providers will adjust premium costs and even stop offering coverage when they wish to reduce their exposure in a particular venue. By self insuring, organizations can avoid this constantly changing landscape

The cost of setting up a Single Parent Captive

 

How Much Does a Group Captive Cost to Set Up?

Setting up this type of captive can require a substantial investment, often hundreds of thousands of dollars or more. Costs include the initial capital required, professional fees for legal and insurance advice, regulatory fees, and the costs of management and administration. However, these costs can be offset by the potential for reduced insurance premiums and improved risk management over time.

Call Michael Richards as there may be an existing group captive that suits your requirements, that may accept you for a joining fee. A group captive that has been successful will normally be very selective of who they allow to join, as all members share in the risk and one bad operator can ruin the organization.

How Do We Get Started?

The set up involves multiple steps, including conducting a feasibility study, developing a business plan, capitalizing the captive, and navigating regulatory processes. It’s crucial to work with an experienced professional in the field.

Michael Richards of Westwood Insurance Group has a wealth of experience in setting up different types of captives for clients. He can guide you through every step of the process and help ensure the captive is managed effectively once it’s operational.

Google-banner

 

View on Google

five-starsMy Insurance agency has done business with Westwood for over 10 years and always found them to be professional...

google-S

Shira Abrams
02 May, 2023

five-starsI’ve worked with Michael Richards and his team now for many years and I can unequivocally say that they are by far the...

google-J

Joe Roth
11 June, 2023

five-starsWestwood Insurance Group, with Dale and Liz are a pleasure to work with in helping solve for my insured’s insurance needs...

Greg Cullom

Greg Cullom
08 Nov, 2023

five-starsLaura has been a great contact for us over at the Westwood Insurance Group. She is extremely communicative...

Google-H-1

Hayley Shryock
30 June, 2023

five-stars

 

 

Kathy Natale

Kathy Natale
25 Sept, 2024

Speak with an Insurance Professional

Michael-portrait-sml

Michael Richards

Michael specializes in setting up or sourcing Group Captives. You can call him or fill out the form and he will get your message directly.

Call 216-502-4967 or
Fill Out the Form