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Just Ask Judy

Feb 9, 2023

It’s frustrating to watch your premiums go up and never get any of that money back. Many companies have looked for alternatives including Self-insurance, Retrospective (Retro), and Group Captive (GC) plans. Each of these allows you to share in the good claim year profits and the bad year costs. These options come with minimum premium and cash flow requirements to be eligible.

I spoke with John Denman of Insurance Marketing Agencies, Inc. to learn more. John explained the pros and cons of each: 

Self-insurance is reserved for large companies that can pay the first few hundred thousand dollars of any claim. If a company can do this and the program is set up correctly, the company can enjoy profits in good years and limit the lousy-year costs.

Retro plans offer some return of premium but have an upside cost if claims are more than expected. Companies hesitate to offer Retro plans and they are usually biased in favor of the insurance company. 

Group Captives offer partial ownership of your own insurance company, along with other financially strong, best-in-class companies in your industry. Some benefits of a GC.

  • Members/owners get control over premiums, claims, and coverages. 
  • Premiums are often lower than traditional insurance companies and more consistent year-to-year. 
  • Safety and claims management is the focus, ultimately improving both employee and public safety. 
  • Operating costs may be reduced, returning profits to the members as dividends. 
  • Members/owners can be as involved as they like in the operation of the GC. The group usually offers exotic travel opportunities to meet your fellow owners while conducting group business. 
  • Other benefits include just one WC (composite) rate for all employees regardless of the industry, simplifying the end-of-year WC audit process. As an owner, you have input into how each claim is handled since it’s your money that’s being used to pay your claims.

John noted that any stable company with long-term financial strength and a commitment to safety should consider a Group Captive if their claims are better than the industry average and their premiums are at least $150,000 per year. It is important to partner with an agent who has established relationships with GC managers and who has knowledge of how those GCs function since this isn’t something most agents understand.

I thank John for taking the time to offer some insight into this complicated subject and encourage anyone with more questions to reach out to John directly. John can be reached via email at or by phone at 978-852-3418.