Forming a Captive Insurance Company
Challenge: A multi-billion dollar contractor was looking for ways to cut costs and improve profitability in light of recent economic conditions. Brown Smith Wallace helped it establish a captive insurance company. We advised the company on how to set up its captive to serve as a reinsurer so that it would cover the layer previously retained via a large deductible policy. This enabled the client to document and capture all of its subcontractor's risks in order to pass the costs onto the subcontractors.
Solution: Our client realized annual savings of hundreds of thousands of dollars. The company was also able to achieve a 20% reduction in insurance costs, stabilize their insurance budget, achieve greater control over corporate deductibles, obtain direct access to reinsurance markets and improve claims handling and data collection processes.