Four Ways an Agency Captive Helps Brokerages

Whether large or small, brokerages that offer captive insurance services benefit from using an agency captive. This type of captive allows brokerages to reinsure their clients’ captive insurance risks. With the help of an agency captive, brokerages experience many benefits, including:


  • Minimized Risk – Businesses purchase captive insurance largely due to heavy risk. Brokerages can quickly accumulate an overabundance of risk in their captive insurance policies, and they need a way to limit the risk of heavy losses.


  • Growth – Brokerages that carry risk without taking advantage of reinsurance options tie up precious resources, because they must be prepared for heavy losses. This stagnation of resources fences brokerages in. If they instead reinsure a portion of the risk, then they are free to use their resources to open new captive insurance accounts, thus increasing revenue.


  • Stability – In this tight economy, brokerages should reinsure their clients’ risks to manage potential losses. When brokerages limit their potential losses to a manageable size, they are more stable than competitors that attempt to manage all clients’ risks on their own. Even unexpected economic downturns fail to cause substantial problems for brokerages who wisely limit risk.


Marketing – Brokerages that make wise risk decisions have better marketing opportunities because they can share information about risk margins with potential clients. In an economy where businesses of all types come and go, brokerages need to show clients that they will last. In this way, they gain clients’ trust and business.