CIC Services LLC
  • Home
  • The CIC Services Difference
    • Meet Our Team
    • About CIC Services
    • CIC Services Approach to Captive Management
  • Captive Solutions
    • What is a CIC?
    • Enterprise Risk Management
    • Bundled Captive Insurance Program
  • Steps to Ownership
    • Choosing A Team
    • Choosing a Domicile
    • The Path Forward
  • Knowledge Center
  • Resources
  • Contact Us
August 27 2019

Swiss Army Captive Insurance Company

Randy Sadler Captivating Thinking

For mid-market and small companies, there are few entities more powerful than a captive insurance company.  Captives are simply a choice to own your own insurance company, and they provide powerful risk management and financial benefits. Furthermore, captives are remarkably versatile, and for this reason, we are dubbing them as $wi$$ Army Captives.  The $$$ signs are no accident.  Captives help companies hold on to more of their hard-earned profits, and they can do it in a number of ways.

A critical element to remember is this: a captive may provide multiple types of coverage all by itself.  This is particularly powerful for mid-market businesses because it provides scale benefits – allowing the costs of running the captive to be spread over multiple functions.  A captive could insure one, some or all of the types of coverage in our $wi$$ Army Captive illustration below.

Swiss Army Knife 3 - With Annotations

Control Costs

First, captives can take the place of some or all of a mid-market company’s commercial insurance, helping control costs.  When the business experiences low or no losses, it is able to retain all insurance premiums paid to its captive as underwriting profits.

Enterprise Risk Management

Second, captives can provide all-encompassing protection to businesses by insuring enterprise risks.  Enterprise risks are often operational or strategic (existential) threats businesses face that A) can severely cripple the business, and B) are often difficult to insure in the commercial market place.  Enterprise risk insurance policies often have far fewer exclusions than commercial policies.

CLICK HERE to read about Enterprise Risk Management with a Captive.

Bundled Captive Insurance

Third, captives can help mid-market companies reduce their net commercial insurance premiums by up to 50% as part of CIC Services’ Bundled Captive Program, while providing A+ rated insurance coverage that matches their existing terms, limits, and pricing while being able to retain or select their insurance broker.

CLICK HERE to read about the Bundled Captive Program.

Warranty Programs

Fourth, captives can insure warranty programs.  Many businesses provide warranties on their products or services either for free or at additional costs.  Such warranties create exposure that can be insured by a captive.  Also, many businesses sell third-party warranties on the goods and services they provide for a modest commission.  Warranty programs often have low claims, and companies can often create “found money” by utilizing a captive to sell their own warranties and keep all warranty program profits versus giving them to a third party.

Performance Bonds

Fifth, captives can issue performance bonds.  This can be a particularly powerful tool in construction or mining operations.  Performance bonds are a sunk cost.  Captives can enable companies with firm control of their losses to turn bonding into a profit center.

Additional Coverages

Finally, captives can be utilized to provide healthcare, vision and dental coverage as part of a company’s employee benefits plan.  Properly structured, captives can help businesses lower their health insurance program costs by 15% to 30%.

Remember, a $wi$$ Army Captive can provide coverage for one, some or all of the above, and help mid-market businesses keep more $$$. To learn more about this service, contact CIC’s team of captive experts today!

Meet CIC Services In Charlotte August 21-23 CIC Services Continues To Lock Horns With The IRS Over Notice 2016-66

Related Posts

Captivating Thinking

Solving the Successful Business Owner’s Chief Conundrum

What is the successful business owner’s chief conundrum?  Sure, business owners face many challenges, for instance, staffing, retaining talent, differentiation in a crowded market, keeping up with change, keeping pace with technology, capital investments, advertising, compliance, insurance, taxes, and a host of other challenges.  And, these are enough to make one’s head spin.  It’s certainly […]

Captivating Thinking

Christopher Gallo, CFE, has joined CIC Services as managing director

CIC Services, a Knoxville-based risk management consulting firm and a leader in the captive insurance industry is pleased to announce that Christopher Gallo, CFE, has joined CIC Services as managing director.

Captivating Thinking

Webinar Recording: The 2020 Election & The Outlook For Captive Insurance In 2021 And Beyond

Want to prepare your business and your clients for the future? On Nov. 4, 2020, CIC Services hosted a webinar titled, “The 2020 Election & The Outlook For Captive Insurance In 2021 And Beyond.” This is your chance to gain insight into how the 2020 election will impact captive insurance for 2021. Stay ahead of […]

Search

Sign Up for Captivating Thinking

Your Email (required)

Archives

Captivating Thinking

  • Cyber Coverage – Captive Insurance Times
  • Solving the Successful Business Owner’s Chief Conundrum
  • Christopher Gallo, CFE, has joined CIC Services as managing director
  • Is Captive Insurance the Right Fit for Your Clients?
  • Tech companies turn to captives as cyber risk increases

Contact CIC Services

9721 Cogdill Road, Suite 202
Knoxville, TN 37932
Phone: 865.248.3044
Fax: 865.966.1199

Subscribe to Captivating Thinking

Your Email (required)

Stay Connected

Stronger Business Model

Businesses who implement ERM programs combined with a captive to plan for unforseen risks stand a better chance of surviving, and passing to the next generation.

Improved Cost Controls

Captive owners can leverage their ERM and captive programs to improve their negotiating ability when renewing their commercial insurance coverages.

Wealth Accumulation

Profitable captives will see their reserves grow over time to significant sums which can be utilized by their owners for retirement or other life cycle needs.

Advantageous Tax Treatment

Insurance companies are the only entities allowed to expense projected future expense against current-year revenues (claim reserves). Small captives (premiums of $2.2M or less per year) may also elect to only be taxed on their investment income, potentially resulting in substantial tax savings for their owners.

Insurance Profits

Utilizing your captive to reduce or replace your commercial insurance coverage with policies issued by your captive allows you to capture insurance profits previously realized by the carriers.

Improved Risk Management

Adding a captive and ERM program will result in a higher awareness and enhanced strategies for how your organization thinks about and plans for all risks.

Asset Protection

The assets held by a properly organized and managed captive enjoy a very high degree of protection from both the business’ and business owner’s creditors.