22 Feb 5 Reasons Captive Insurance May Make Sense
Is Captive Insurance Right for Me and My Company?
Captive insurance is typically the best option for mid-to-large sized companies and organizations which spend at least $200,000 a year on casualty, property and other insurance.
5 Reasons why you should switch to captive insurance:
1. Tax Benefits: Tax deduction for the parent company for the insurance premium paid to the captive, and various other tax savings opportunities, including gift and estate tax savings for the shareholders and income tax savings for both the captive and the parent company.
2. Investment Income: A business owner with captive insurance controls the disposition of the loss funds (within certain parameters) until they are paid out in losses.
3. Improved Cash Flow: Losses retained through a captive reduce or eliminate underwriting profits; reduced losses increase them. Because captive insurance inherently offers financial rewards for effectively controlling losses, safety and loss control get a higher level of attention.
4. Broader Coverage: A captive insurer can successfully provide coverage for difficult risks that is tailored to fit the exact needs of the insured(s)–as long as Stability in
5. Pricing and Availability: Pricing stability is achieved over time as a captive matures and expands its own risk retention capability. The more capital that is accumulated, the greater the captive insurer’s ability to retain risk and insulate itself from changes in the commercial insurance market.