Abstract City Lights

ALTERNATIVE RISK FINANCE

Risk management and safety are cornerstones to a successful group captive partnership.  

ARE YOU BEST-IN-CLASS? YOUR INSURANCE PROGRAM SHOULD BE TOO. 

HOW THESE PROGRAMS WORK:

Risk-Financing vehicles embody several forms that offer varying levels of risk and reward. These programs incentivize the insured to reduce claims activity, develop a culture of safety, and maximize profitability. They’re typically used on: worker’s compensation, general liability, and automobile liability. Each program offers varying degrees of benefits depending on the level of risk the insured will absorb. Working with an insurance professional that will take the time to understand your risk tolerance, business objectives, claims experience, and risk management culture are critical in determining the feasibility of the desired risk-financing program.

If you spend over $150,000 in premiums (including: General Liability, Automobile Liability or Workers Compensation) and have developed sophisticated risk management and safety programs, consider exploring alternative risk-financing vehicles. These vehicles allow the insured to share in the carrier's profits, saving between 15% to 50% on guaranteed cost premiums.

Alternative Risk Finance (ARF) refers to optional methods of risk transfer through insurance products other than a Guaranteed Cost policy.  Guaranteed cost policies provide an insured with the highest cost certainty during a specific policy period because their premiums will not fluctuate based upon their claims performance. Many companies unknowingly purchase a guaranteed cost program because they are unaware of alternative options that could save them money.

 

We’re here to change that. An insured's loss activity ultimately determines the success of their Alternative Risk Financing program which is why our team works with our clients to develop effective loss control programs that reduce claims (ideally 45% loss ratios or lower) . For more information, please check out our Risk Management Solutions.

RISK FINANCE STRATEGIES:

  • Dividend Program

  • Retrospectively Rated Program

  • Large Deductible Program

  • Group Captive Program

TOTAL COST OF RISK (TCOR):

Includes:

  • Premiums

  • Administrative Costs

  • Claims Costs

  • Deductible Expenses

  • Profit Sharing

BENEFITS:

  • Costs are determined on an individual basis not on industry-wide loss experience

  • Profit sharing potential (Dividends)

  • Increased premium stability & predictability (premiums are no longer based upon general market conditions)

  • Improved cash flow

  • Increased control over claims handling

QUANTIFIED RESULTS:

ARF can result in up to 50% total cost of risk reduction.