SAN DIEGO – The tough insurance market is increasing interest in group insurance companies, but the structures offer benefits that will last longer than pricing cycles, say risk management and captive experts.
Contractors who are competitive in other areas of their business can use group-based structures to share safety and risk management practices and improve their loss reports, they say.
In addition, the inclusion of senior executives in captive meetings can improve the risk management processes of member companies, they say.
As prices have risen across several coverage lines in the midst of the tough market, interest in captives is growing, says Jason Oswald, president and CEO of Construction Insurance and Risk Captive of America Ltd., a group based in Bermuda for entrepreneurs. [1
"You buy into an insurance company, another business, and you do not have to do it blindly, "Oswald said during a session of the IRMI Construction Risk Conference in San Diego on Monday.
CIRCA requires potential members to attend a board meeting and the process takes at least 90 days, he said. . "We're really looking at the cultural fit," he said. President, risk management, at Jordan Foster Construction LLC, a member of CIRCA.
Entrepreneurs who can bid on each other in their core business can share risk management methods that can benefit all team members, she said.
"We wanted to learn from like-minded people. , "said Kagerer.
Being in a group prisoner can also help when an entrepreneur suffers heavy losses, she said. "When there is a problem, I want to know that I am sitting across the table from someone who asks me difficult questions but understands my risk profile."
If a member suffers a significant loss, the prisoner's loss prevention and risk management resources can be directed the problem to reduce the likelihood of it happening again, rather than the contractor trying to solve the problem individually, said Kagerer.
Another benefit of captives is that senior executives at member companies attend meetings and learn more about the benefits of risk management rather than to only see risk management costs as a cost to the company, she said.