Group captives are insurance companies that provide insurance to, and are controlled by, their owner-members.
While they operate under the same fundamental risk-sharing principles as traditional stock or mutual insurance carriers, the pool of risk that is shared in a group captive is determined much differently.
Only those truly best-in-class businesses are able to leave the traditional insurance marketplace and become owner-members of a group captive. This allows them to capture underwriting profits and investment income in the form of dividends as well as shield themselves from often volatile rate cycles.
As group captives gain popularity, premier businesses flee the standard marketplace, resulting in adverse selection in the remaining pool. The overall quality in the traditional market declines and upward pressure is applied on premium rates for everyone.
Since 1999, our innovative team of skilled experts, in partnership with the oldest and largest independent captive consultant in the nation, has been helping businesses determine if a group captive is right for them. Every year, with our assistance, even more business owners make the decision to leave traditional risk financing behind.
Learn more about Group Captives
What is a group captive?
Group captives are independently owned and operated insurance companies that provide insurance to, and are controlled by, their owner-members. A captive insurance company insures specific risks of its owner-members and returns underwriting profits and investment income in the form of dividends to the owner-members.
Who should consider a group captive?
Businesses seeking alternative risk financing methods tend to share some common characteristics. Members are generally businesses with strong management teams that recognize the impact a commitment to safety and risk control has on financial strength. Members generally begin their transition to group captives when annual casualty premiums surpass $100,000, and loss histories reflect consistently better than average experience.
Why would I join a captive?
The captive approach allows members to obtain the benefits of good experience. Group captive owner-members enjoy lower costs, increased stability, better service and claims management, and a greater level of control over their risk management strategy. This sophisticated, long-term approach to risk financing affords members the ability to spend less time addressing insurance issues and more time running a business.
How does a captive offer me more stable and predictable costs?
By pooling your premiums with some of the best-run businesses in the U.S., you take your business out of the adversely selected insurance pool. Each member of the captive becomes an owner by purchasing a share of stock. The owners, with guidance from the captive consultant, determine who provides services to the captive (i.e. claims, loss control, accounting, investment) and who is offered membership. The captive is designed to reduce fixed costs and return the underwriting profits and investment income to the members.
I'm interested! How can I get started?
We take great pride in our ability to successfully guide a potential member through the process of joining a group captive, and it all starts with a basic introduction. Kraus-Anderson Insurance is one of a limited number of firms in the United States with experience specializing in the captive industry. Our innovative team includes experienced risk consultants with advanced professional designations and a relationship with the oldest and largest independent captive consultant in the nation. All of the group captives we work with are owned by our clients. We are not owners in captive programs, nor do we participate in any of the profits or dividends.