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. Group Captive Insurance
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.
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 can return unused premiums and investment income back to members.
