The growth of captive insurance companies is expected to grow from 5,000 to 10,000 in the next three years. One area that is growing, despite the recession, is the producer-owned (or agent-owned) captive insurance company.
Successful insurance agents earning substantial insurance commissions have come to recognize, through a feasibility report and business plan, that they can create another profit center with the produced-owned captive insurance company.
All agents are required to purchase insurance agent errors and omissions insurance coverage up to substantial $1 million, $5 million or $10 million of coverage. The captive by providing coverage for the deductible under this policy can be used to start the captive off.
Insurance agents have access to other types of coverages that can be written in their captive. Agents need to be like the car dealers that use their captives to write the insurance on vehicle service contracts. Verizon makes profits from using their captive to write cell phone coverage.
Insurance agents need to explore the non-traditional coverages ... let’s explore some: gambling casinos writing economic recovery insurance in their captive, advertising agents writing bad debt coverage in their captive, accountants writing professional liability coverage in their captive, storage warehouses writing rental insurance in their captive.
Active domiciles are permitting the expansion of insurance coverages. Financial guarantee coverage can be written in your captive, with the purchase of appropriate reinsurance.
Insurance agents need to explore the feasibility of having their own captive, the way real estate firms have written terrorism coverage in their captive.