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Employee Benefits

Share the risks – and the rewards.

The use of captives has increased steadily as more employers discover the advantages and flexibility of captives and alternative risk transfer structures. In fact, they are being adopted by a wide range of businesses – from large corporations, to medium and small sized companies. Diversified Benefits Group has the expertise and experience to help you take full advantage of this trend.

Basically, multiple companies or employers come together to create their own insurance company or captive that insures the risks of its employees. The captive insurance company is an alternative to conventional insurance and consists of three levels of risk and responsibility for that risk. First is a pre-funded risk by the individual company, then the captive level where all members of the captive pool their risk and share the cost of claims and finally a stop-loss policy to manage exposure to any catastrophic claim. Any excess premiums creates a profit center.

The captive insurance company then operates like a traditional commercial insurer – issuing policies and paying claims. However, it offers you a much greater degree of control and self-determination. In addition, the captive or alternative risk transfer model:

  • Minimizes insurance cost and improve pricing stability 
  • Can be fully customized to the needs of the member companies and their employees, including benefits not offered through traditional plans because of cost
  • Spreads the risk among a group of companies in the captive, instead of bearing the entire burden in a self-funded plan
  • Improves cash flow by paying premiums into the captive at more favorable intervals
  • Offers greater control over claims
  • Provides the opportunity for wealth accumulation 
Diversified Benefits Group can help you to evaluate the benefits of becoming part of an insurance captive, as well as self-funded and fully insured options. Just ask your Diversified associate.