Benefits of Single Parent Captive Insurers

Benefits of Single Parent Captive Insurers

Captive insurance companies represent an opportunity to control your costs while accessing the best and most form-fitting insurance possible. They can be used for anything from group health coverage to liability insurance, and that is why they have been popular for decades. If you are fairly certain you want to invest in captive coverage but you have yet to decide between a partnership and a single parent captive solution, the single parent option has a few advantages to recommend it.

  • Complete control over costs and policy parameters
  • Recapture 100% of overpayments as profits if desired
  • Calibrate the captive insurer’s finances to add or remove insurance services as needed and without anyone else’s input
  • No need to negotiate diplomatic management solutions with potential competitors to access coverage

All of these advantages do come with one significant challenge, however. Single parent companies require substantially more capital to start up than joint captives.

Picking Your Captive Insurance Solution

If you have the money, there are potential long-term savings to a single parent captive solution you just cannot count on if you partner up. The costs of other companies’ claims will always impact your bottom line, as will the necessities of joint management and shared profit returns from overpayment. In the end, it comes down to how much control you need. If you invest the labor, single parent solutions become more cost effective. If you want to be a little more hands-off and delegate out some responsibility, shared options favor your company.