If you own or lead a business generating $1M+ in annual revenue, you are likely self-insuring more risk than you realize — and paying for the privilege. Reinsurance Specialties helps business leaders across 30 states replace that exposure with a Privately Owned Insurance Company (POIC): a legal, IRS-compliant structure that protects assets, improves risk management, and converts premiums into retained wealth.
For many years, large corporations have used alternative risk transfer strategies to augment commercial P&C policies, reduce insurance costs, mitigate claims and improve risk management. With the changing dynamics among traditional property and casualty insurance companies, these benefits are even more important to middle market companies, as well as groups and associations.
A POIC insurance platform is the premier risk management and risk financing tool. For forward-thinking companies, managing and financing risks (as well as protecting assets) have become important aspects of overall business strategy.
We invite you to review this website and contact us to discuss how your organization can obtain the benefits of a POIC insurance company and other alternative risk transfer vehicles.
As with other insurance company structures, properly-formed POIC have many asset protection benefits.
Insurance companies follow special rules with respect to taxes. Statutory tax benefits are available to all insurance companies, including POICs — making the overall structure highly efficient from a tax planning standpoint.
Typically, 35%–50% of every premium dollar paid to a commercial insurer covers their overhead and profit margins. A POIC captures that spread, turning an expense into a retained profit center.
Conventional insurance typically provides little incentive to improve risk management, as there is no participation in the profitability of the insurance program. However, with a POIC, the business will benefit from good claims practices and experiences. A POIC provides strong incentives to improve risk management throughout an organization.
POICs make sense when and where the commercial market is unable to provide coverage for certain risks (including warranty, reputation, regulatory, product liability, business interruption risks), or where the price quoted is unreasonable (such as medical malpractice or construction defect).
With a POIC, premiums flow into a company you own — not a commercial insurer. Your reserves are invested and generate returns, while strong claims management lets you retain underwriting profits directly. The result is improved cash flow and a meaningful investment income stream.
A POIC insurance company is less vulnerable to the cyclical nature of hard and soft markets that affect the conventional insurance market. Thus, a POIC can aid a business that requires accurate financial projections.
Once a POIC has been established, the business owner (Insured) can self-insure their uninsured and under-insured risks. And it is common for the insured business to adjust premium and deductibility with their commercial P&C.