Member Owned Group Captive

Situation:

A group of nationwide Moving and Storage Companies were dissatisfied with the traditional insurance options available for their casualty lines of insurance.  The combined lines casualty premium for the movers ranged from $200,000 on the low side to $1.2million on the high side.  Collectively, the premium totaled $8million.  Each of the businesses purchased Guaranteed Cost or Low Deductible Insurance with little or no benefit for favorable loss experience.  The traditional market products offered little creativity and little long term control. 

Problem:

The moving and storage business was always amongst the first to receive rate increases in a hardening insurance market.  In addition, the numbers of companies willing to entertain this business was few.  Lastly, traditional underwriters consistently classified these companies using long haul trucking rates.  The movers along with their insurance agents sought out an alternative structure.

Solution:

Working with Keystone Risk Partners (KRP), a Member Owned Group Captive was formed.  The newly created captive offered all of the benefits typically afforded larger paying businesses:  Access to underwriting profit and investment income, unbundled claims handling, premium calculations based on historical loss experience, and cash flow flexibility.  The group successfully launched with $7million in premium with the member companies truly believing they had taken real control over their long term net cost of insurance.