Most businesses see insurance premiums as a necessary expense. In a hard market, decisionmakers are often faced with accepting increasing premiums from insurance carriers even with minimal individual loss history. To reduce insurance premiums, businesses may shop around, increase deductibles, or worse, cut coverages. In fourth quarter 2021, commercial property and casualty premiums increased an average of 8.7% across all account sizes, with increases across all lines of business, including workers’ compensation coverage.
Captive insurance is often a solution that is overlooked because of anticipated complexity, the start-up costs and the commitment required to form a single parent captive, or concerns surrounding group captives and potentially paying for losses of companies with inadequate risk management.