As an agent within a larger insurance firm, you may have wondered whether providing your clients with an agency captive option would be beneficial. When insurance markets are rough, some agents may have the option to form captive insurance as a helpful alternative. Here’s why this route could prove fruitful for your clients and for your agency.
Agency Captives Could Provide You With a Share in Underwriting Profits
Insurance agents who opt to set up captive insurance could find it surprisingly beneficial. For instance, this setup could let you or your firm:
- Assume a certain amount of risk you otherwise might not with other types of insurance
- Keep certain amounts of investment income
- Share in a portion of underwriting profits
You Could Partner With an Experienced and Qualified Carrier Partner
Many agents choose to partner with highly qualified carriers to offer captive insurance. Look for a partner that comes with:
- A low loss ratio
- A diverse business book
- Several types of account and class sizes
- Specialized expertise in underwriting
When the insurance market is tight and your clients are seeking a straightforward alternative, you may want to propose an agency captive solution to them. This route can provide helpful insurance coverage for your clients, while potentially providing you with a share of underwriting profits and an experienced carrier partner.