Guest Perspective
Risk Financing, Part 1 of 3 premiums grew again in 2023, driven by both existing and new captives.
Lastly, according to expert Ken MacDonald of R13k Consulting,“ history and statistics tell us that captives do not reduce in total numbers in a soft market, or even a prolonged soft market. This is a testament to the totality of the benefits that captives deliver.”
Timeline Considerations
There are multiple facets involved in setting up an alternative risk financing or captive insurance structure that logically requires proper due diligence and serious timing considerations to protect everyone’ s business interests.
To ensure the whole process runs as smoothly as possible, the captive industry experts suggest the shortest timeline to establish a captive insurance vehicle is six weeks post a captive feasibility study. Considering the critical nature of the feasibility study component within building a captive program, and that the feasibility study process alone will take four to six weeks, a rational assumption for building a meaningful captive model is three to six months start to finish.
Conclusion
As indicated previously, there is a growing interest today, on a worldwide basis in captive programs considering the volatile traditional insurance market. In fact, with regard to supporting the emergence of captive solutions in our marketplace, we need to recognize one of the leading commercial insurance agent / brokers serving the U. S. CR / ST marketplace, USI Insurance Services, for their recently well prepared and delivered webinar sponsored by the Specialized Carriers and Rigging Association, entitled” Captive Insurance Programs: Is Your Company Captive Ready?”
USI made a highly insightful and professional presentation on captive insurance and risk management for crane, rigging and specialized transport operators in this webinar. USI is considered a market-leading insurance agent / producer of risk
management-based insurance in our marketplace for over the past 30 years. The USI presentation emphasized a key element in captives having the ability to unbundle risk services for the customer / user to tangibly mitigate their risk.
We should recognize Jeff Haynes, Randy Proos and James Stovall for making this important presentation in support of alternative risk financing methods to protect the futures of crane-rigging and specialized transport customers.
This concludes the first edition of this three-part article series. Part two will cover a five-step primer on how to set up a captive structure in your organization, including the different types of alternative risk financing vehicles and the importance for conducting a formal captive feasibility study for your organization in preparation for alternative risk financing.
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.
BRADEN has proudly set the standard for industrial winches, hoists and drives since 1924. From the first conventional horizontal winch to the patented BRADEN brake valve, we continue to drive innovation by working hand-in-hand with our customers to deliver the highest quality custom engineered solutions— backed by the best customer service and support in the industry! www. arrowheadwinch. com
12
February 2025 • www. cranehotline. com