Risk Financing, Part 3 of 3

Group Captive Model Cost Reduction Features

Premiums derived from individual member loss history.

Extensive risk management & safety resources & support.

Continual risk management measurement, remediation & improvement.

Proactive involvement by insured in supporting the TPA in the claims management process.

These aspects of the model empower members to continually drive down costs.

Negative public sentiment & mistrust of larger corporations.

Social and economic inflation factors contribute to higher insurance costs.

Erosion of tort reform.

Economic inflation.

Increasingly large jury awards.

Inflationary Environment

Dividend potential for better than expected losses.

Litigation funding & costs.

Heading Off Litigation Costs

In the face of dramatically rising litigation costs and jury awards in crane incidents today, it becomes critically important to focus on effective post claim mitigation strategies.

Group captives can be designed specifically to help member insureds control these rising costs through progressive incident management and shock loss protocols that contain litigation.

A captive TPA with a defined risk mitigation support system that includes corresponding national networks of local counsel, local independent adjusters, led by a national coordinating legal counsel has a fighting chance to prevail in today’ s litigious environment. The flexibility to utilize the high-end litigation containment resources mentioned is thought to be one of the most beneficial features in member-owned group captive plans.

Conclusion

In addition to the potential for premium savings, member-owned group captives tend to benefit members through greater financial flexibility and customized crane industry specific protection against losses. This is due to greater control of and transparency into insurance program costs.

Improved risk mitigation support and enhanced safety are often the top benefits of member owned group captives. Extensive risk resources and support with both pre- and post-loss focus, in addition to continual measurement, drive continuous improvement.

Kevin Cunningham is president and CEO of Crane Risk Services, and has 27 years of experience in crane risk management. He can be reached at Kevin @ craneriskservices. com.

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