Better risk management
Corporations with better than average claims records may consider establishing a captive or increasing retentions considerably.
Establishing a captive insurer or increasing retentions does not generate instant premium savings, but it will start a process of strengthening and intensifying the corporation’s focus on risk management which will imply:
- Fewer claims –> safer future
- Strengthening risk management
- Reducing claims
- Boosting captive’s retention levels
- Investing more in risk management
- Building information data bases, including better data registration for improved risk measurement
- More aggressive risk management will other things being equal, reduce costs. Any financial surplus may either boost retentions through an increase in equity and/or be used for investment in even better risk management. In other words, the corporation embarks on a journey to success.