Captive Insurance

Captive Insurance Services

Captive insurance companies are continually growing in popularity as a unique and effective risk management tool. Business owners face risks every day from cyber-warfare, workplace safety, trade and goodwill within the multimedia landscape, or even economic challenges resulting from a global pandemic.

Creating a captive insurance company allows business owners to participate in alternative risk management. Once established, the captive operates like any commercial insurance company and is subject to state regulatory requirements, including reporting, capital, and reserve requirements. However, the insurance premium dollars are retained within the business enterprise or the same “economic family,” thereby increasing investment income on unpaid loss reserves, capital, and surplus.

The federal courts have ruled that a captive insurance arrangement will be respected as a bona-fide insurance arrangement, including for purposes of federal income tax treatment, if the risk transferred is one of economic loss that is not merely an investment risk or inevitable future cost of the insured. Intense scrutiny of the captive structure, particularly around the treatment of tax, dictates that the structure be properly constructed. Only companies that identify and ensure true insurance risks will ultimately enjoy the significant financial benefits afforded to captive owners.

Ryan provides the qualified and comprehensive support required to create and manage a well-structured and credible captive insurance company. Throughout the engagement, and in coordination with a team of licensed, third-party actuaries, we assess client data and business goals to assist clients in determining the viability of a captive based on cost and benefits. From these findings, we build a detailed comprehensive strategy and business plan, identifying and strategically selecting the best structure to meet our clients’ unique risk management needs. In coordination with the third-party actuaries, they are able to identify appropriate insurance coverages and risk for their business outside of current client policies. Our professionals stay involved throughout the entire process, adding additional recommendations for incorporation and licensure in the following areas:

• Preparing and filing all applications for regulatory compliance
• Ensuring the captive structure aligns with your alternative risk management needs
• Coordinating of underwriting and actuarial support
• Providing ongoing operational support, day-to-day and monthly accounting, claims administration, and regulatory advisement
• Assembling and coordinating the preparation and filing of multiple necessary tax returns for the captive insurance company

Workers’ Compensation

Many companies are placing greater emphasis on outcome-based programs to reduce workers’ compensation costs. To better serve our clients, Ryan recently entered into a joint venture with Salus, a leader in workers’ compensation claims management. Salus offers an innovative process and management style of claims that substantially lowers overhead cost and the need for litigation. This liberates clients from carrying these costs and allows them to place capital back within the company for further expansion of their enterprise. This new system uses a process and method that gathers pertinent information for both the employer and adjuster in identifying cases of injury occurrence and injury patterns. In recognizing these two pertinent pieces of foundational information, clients can identify opportunities for adjustment and further savings. 

This tailored experience has been proven to save a client on average 20–30% in workers’ compensation loss expenses just in the first year. Cutting-edge technology simultaneously feeds data and information to both the adjuster and employer, helping them identify injury patterns and adjust company policies and best practices accordingly. 

Our partnership with Salus offers clients a tremendous opportunity to reduce costs and efficiently manage workers’ compensation claims. Companies that utilize Salus see many benefits, including:

• Effective coordination between injured employees, employers, medical professionals, and insurers
• Specific industry experience, knowledge, and awareness of workers’ compensation claims and patterns
• Proven methods with documented success; the highest loss ratio seen by Salus clients to date is 40%, whereas the industry averages loss ratios between 60–70%
• Claims savings and lawsuit avoidance
• Quick and efficient delivery of high-quality healthcare
• Optimal outcomes for both the employee and employer