Captives/Alternative Risk


Group Captives are an innovative risk pooling arrangement whereby middle market companies can take advantage of the economies of scale usually only available to larger corporations. Cobbs Allen has significant experience starting captives, placing clients in existing captives, and evaluating captive options.

The reality is that all companies are classed in "pools" from the perspective of an insurance carrier (a fundamental principle of the law of large numbers that drives insurance!). The best risks in the group generally have low loss ratios. The worst risks generally have high loss ratios. Group Captives seek these "best in class" companies to band them together with other "best in class" companies to form high performing, small insurance companies. The profits from these super-insurance companies are given back to the policy holders. If your company pays more than $250,000 annually for workers compensation and has a low loss ratio, congratulations! You’re running a great business! A Group Captive is a creative way to share in some of the profits.

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