Earlier this week, Captive Resources Chief Marketing Officer, John Pontin, joined Insurance Information Institute (Triple-I) CEO Sean Kevelighan to talk about the group captive concept. The conversation was part of Triple-I’s Executive Exchange series and focused on how group captive insurance can help companies combat rising insurance costs, especially during inflationary periods.
“Fundamentally, the whole group captive concept is predicated upon helping lower insurance costs for best-in-class middle market and upper middle market [companies],” said Pontin. With group captives, “you can actually control your costs regardless of what's happening out in the [market]. Pricing, for instance, is based on actuarial analysis, not off a pricing model or industry rates.”
Kevelighan asked about a disturbing trend in insurance of large, runaway claims. Pontin highlighted the ownership aspect of group captives and how that helps members control claims costs.
“A major advantage of the group captive model versus the traditional insurance model is participation in the claims process,” explained Pontin. Group captive members “have a say in that process, and they have a seat at the table when it comes to [handling claims], which is quite different from how it might traditionally work.”
Kevelighan and Pontin moved on to discuss the model more broadly, with the Triple-I CEO asking what makes group captives so unique. Pontin touched on several components, including the camaraderie and cooperation between members.
“I would say the cultures that the members build. [A major aspect] of group captives compared to a mutual or something else is the true ownership aspect,” said Pontin. “Most business owners are entrepreneurs, they appreciate decision-making, and they like to take risks at some level. Group captives bring people like that together from across the country and across different industries, and they really create partnerships over time.”
Watch the video below to hear the whole conversation.
Today’s inflationary environment has contributed to soaring insurance premiums for many companies, leading them to seek ways to control costs. Triple-I’s brief explains why group captive insurance can be a viable risk financing solution to help companies lower and stabilize premiums — Group Captives: An Opportunity to Lower Cost of Risk.