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Partner Corner: The Best of Times for A Captive Insurance Company

ASSOCIATIONS NOW, August 2009 Community now

By: Michael Murphy

Challenge: What impact does the current financial situation have on our association's sponsored insurance programs for members, and how can we protect these programs?

Solution: Surprisingly, unlike other financial sectors, most segments of the property/casualty insurance industry are still laboring under a prolonged buyers' market, presenting an unprecedented window of opportunity for associations to enhance the value proposition to their members.

Many associations have significantly improved their sponsored insurance programs' participation, profitability, stability, control, and asset base, while strengthening their agent partnerships, through an association captive insurance company. 

Association captives are owned and created under the auspices of special enabling laws to self-insure a portion of their policyholders' risk. Members of a specific industry with similar exposures are grouped together in large premium blocks. Doing so helps provide better coverage, lower cost (by capturing underwriting and investment income that would otherwise go to insurance companies), greater stability, and the creation of a new asset base for the association.

Because of significant innovations in the captive industry in recent years and the current buyers' market, now may be the best time to consider the feasibility of an association-owned captive insurance company. 

Michael Murphy, ARM, is a senior managing director of Beecher Carlson and captive manager for the ASAE Insurance Company. He specializes in the feasibility, design, and formation of complex captive insurance companies. He can be reached at 303-877-8715 or 

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  Mark Capstone , July 14, 2014
Good article. Association captives or captive insurance companies in general are great risk management and estate planning tools. At, we always encourage our clients to form captives and protect their businesses in the process.


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