POIC INSURANCE
THE MIDDLE MARKET SOLUTION
POIC STRUCTURE
A Producer Owned Insurance Company (or POIC) is an insurance company that re-insures the risks of its owner, affiliated businesses, or a group of companies.
MOTIVATING FACTORS
THE VALUE PROPOSITION OF FORMING A PORC INCLUDE:
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WORKERS COMPENSATION
A business with large workers compensation or general liability deductible can use a risk mitigation structure to establish a self-insured retention (SIR) layer for that risk, immediately recognizing a tax benefit. The premiums paid to the large insurance carrier are reduced because the deductible is collateralized.
EMPLOYEE BENEFITS
POICs can re-insure employee benefits such as health insurance, executive retirement programs, group term life and long-term disability, achieving substantial cost reductions to the business.
WARRANTY
POICs can re-insure a business' product or service through a warranty. This represents classic risk management strategy following decades of application in the auto industry.
UNDER-INSURED RISKS
POICs can cover uninsured and under-insured risk exposures not covered by a commercial Property and Casualty Insurance organization. In the best risk mitigation models, licensed, third-party actuaries are used to identify/qualify clients' risk profiles using centuries of actuarial tables; these risks may include business interruption, legal risks, reputational risks, key man risks, loss of key customer risk, loss of key vendor risk, and more.
MOTIVATING FACTORS
THE PURPOSES OF FORMING A POIC INCLUDE:
Risk
Management
Solutions
Specialized Coverage
Specialized coverage, such as business interruption insurance or comprehensive directors and officers coverage, can be obtained at reasonable and consistent rates.
Creditors & Finance
Creditors and Finance organizations can underwrite creditor/insured coverage such as:
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Collateral Protection
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Vender single interest
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Other credit risks and additional self-insured risk.
Construction
POICs can re-insure expensive subcontractor default, construction defects, mold, and other construction-related general liability risks, thereby improving cash flow and profitability of the General Contractor/Developer.
Medical Malpractice
Hospitals, physician groups and medical professionals can self insure all or part of medical malpractice risks, obtaining underwriting profit, and achieving better loss and claims control.
Property Coverage
Large property holders can use a POIC to re-insure completed coverage or differing layers of property coverage, thereby reducing overall insurance costs.
Non-Traditional Lines
POICs can re-insure non-traditional insurance coverages, including: equipment maintenance warranty, credit life and disability, employment practices, credit risk, post-retirement medical benefits, private mortgage insurance, extended-service warranty, voluntary employee benefits such as supplemental life, pollution liability, and medical stop-loss.
CONTACT
REINSURANCE SPECIALTIES
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