Automotive Group Joins Captive, Reduces Insurance Premiums by 25%
Captive insurance companies enable organizations with excellent loss histories to enhance protection, customize insurance policies and benefit from underwriting profits that generally go to a third-party insurance carrier. Hylant's team of experts educated this client about a captive solution, conducting a feasibility study to illustrate the benefits it could achieve.
Challenge
An automotive group with more than 600 employees had been with a traditional insurance provider for more than 25 years. Though happy with the relationship, the company was missing out on enhanced savings, given its favorable loss experience and lack of control over insurance costs.
Solution
Hylant began the education process with the company, illustrating the advantages of joining Haven Re and creating long-term stability over annual insurance expenditure.
Though initially skeptical of the program's ability to be a long-term solution, the company engaged with the captive team to understand Haven Re's structure, discuss the submission timing and develop an overall strategy to determine its viability. The fronting carrier and excess provider visited the automotive group's facility in person to better understand the business and take a deeper dive with the company's stakeholders.
It was clear that the company's operations were best-in-class and that strong controls were in place to ensure a captive solution would be a feasible long-term strategy. The company was invited to attend the captive board meeting and connect with the existing members to clarify the program's benefits further.
Given the 25% initial premium savings against their conventional market pricing and the interaction with the other Haven Re members, the company severed a 25-year relationship with their traditional carrier and elected to join Haven Re.
Results for the Client
$1.2 Million
Total accumulated equity during their five years of membership, excluding disbursed dividend distributions
37%
Reduction in premium costs against traditional spend
Ease and Flexibility
Captive use has made it easier to obtain the unique coverage needed by the company.
Involvement
The member is now chair of the captive's finance committee.
Estimated Captive Premium Savings Versus Standard Premium
Through group captive utilization, the client has achieved estimated premium savings against the traditional market of $1.2 million. This estimate does not take into account accumulated equity as a result of favorable loss experience. The additional equity will improve the overall savings picture.
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