There are a number of alternatives that are used to reduce profit in a buyer’s insurance program. All of them involve, at some level, retention of losses on the part of the buyer. There are a myriad of loss sensitive programs that some underwriters can utilize to meet the demands of their more savvy clients. However, not all companies offer these plans and when they do the parameters of qualification are such that many who really would benefit, do not qualify. Clients who seek out loss sensitive alternatives to reduce their ultimate costs are limited by their individual premium size in their ability to leverage the transaction such that the fixed expenses and profits (to the insurer) of the transaction are sufficiently minimized. Many never qualify despite excellent experience because their premiums are considered too low.
Size matters. Most middle market accounts between $200,000 in premium and $1,000,000 in premium are left with guaranteed cost or a less than optimal program structure that either causes the buyer to retain too much risk, post too much security and/or includes expenses and profit that are excessive due to a lack of buying power.
There is a better way, for some, to take control of the process and achieve an efficient risk transfer that minimizes the ultimate cost to the buyer and provides a long term solution.
ECM Solutions is a market leader in the captive market. Many consulting firms in the marketplace ‘talk’ about captives, but very few have:
- Decades of captive placement and management experience
- Infrastructure and market contacts to make your captive a success
- Client base with whom to speak on the benefits and challenges of this financing approach
- Expertise to make it all work for your benefit