Is a Captive Insurance Program Right for Your Company?

Captive insurance is a very hot topic in today’s insurance market. As more and more companies begin looking into captive insurance, it becomes increasingly feasible for smaller companies. This means you may qualify for a captive insurance program even easier than you thought.

If you’re trying to take advantage of more stable pricing, you’re in a high-risk industry, or you just want more control over your agency, a captive insurance program could be right for you. Since feasibility studies take a lot of time, effort, and resources, you’ll probably want a better idea of if you even have a shot of qualifying. Here are four questions you can ask yourself to get a better idea.

How good is your loss experience and claims history with your current insurance broker?

The most successful captive insurance programs have a loss rate of 50% or lower. If you already meet that mark, you’re on your way to a successful insurance program. To find out whether that’s the case, you can request the information from your current insurance broker.

If you’ve got a commitment to safety in your operations, you would be more likely to benefit from a captive insurance program.

Are your combined insurance premiums greater than $100k?

This is a good baseline threshold to look at. If the premiums for all your insurance policies combined costs $100k or more, you’re likely a good candidate for a captive insurance program—particularly a group program.

Do you have a strong track record of healthy financial stability?

A company that would have great success for this sort of program is one with a strong history of financial security. If you’re able to turn a profit year after year, and have a clear goal for your company’s future, then you’re a better candidate for a captive insurance program. 

Do you have enough cash for a sizable investment into your future?

Possibly the most important factor is whether or not you have sizable enough savings to make a large investment. To set up your own insurance entity, you’ll need a large amount of capital. You’ll need collateral, stock purchasing, and numerous other investments. 


If you think a captive insurance program might be right for your company, you should discuss it with a reputable insurance agent. We at Callahan & Rice hope this information has helped you decide whether or not to consider a captive insurance program.

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Are you ready to save time, stress, and money? The team at Callahan and Rice Insurance Group is here and ready to make the process as painless as possible. We look forward to meeting you!

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