Hard Market Ahead for Insureds

History, as they say, repeats itself. The insurance market is no exception. Just as in the mid 1990s and again in the early 2000s, we are headed into what is predicted to be an extended period of soaring rates and limited coverage options. Insurance industry folks have a name for it: a hard market. The term is not meant to be taken literally, but hard is a great description of what lies ahead:

  • It will be hard to place coverage
  • And,  even harder to absorb the huge increase in premiums

Past hard markets pushed many companies into seeking alternative ways of covering risk, referrred to as ART (Alternative Risk Transfer) programs. Large companies formed their own captive insurance company, which is owned by the parent company that creates it. There is one very significant difference this time around, and that is that the cost of forming a captive today is far less than it was the a few years ago. Captives are quickly becoming a cost effective and strategic way for middle market companies to manage risk. You need to understand what forming a captive can mean for your company. Time is running out.

You can read more about captives and middle market companies in this article in Business Insurance, or by downloading “Forming a Captive: A Strategic Solution for Closely Held Companies”.

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