Very often Captive insurance solutions are also called ‘Self Insurance’ and for good reason. When a business chooses to Insure themselves by opening their own dedicated Captive insurance cell they are indeed ‘self Insuring’. But we believe that there is so much more to this often used phrase: ‘self insurance’.
The phrase Self Insurance can cover a multitude of behaviours but mostly it centers around the non purchase of insurance in the standard market place. Self insurance can refer to a business that prudently, but inefficiently, sets aside cash on it’s own balance sheet to save for the inevitable loss occurrence to the business that simply does nothing, doesn’t buy insurance and sets aside nothing, both actions are referred to as ‘self insurance’.
We were discussing what the difference was when our clients self insure by using one of our Captive cell structures and we felt that our client’s don’t just self insure but own their risk. In fact so strongly did we feel that the phrase ‘Own your risk’ better represents our clients’ actions that we made it our new brand voice, which represents our mission as a company.
Our clients don’t just ‘self insure’, they truly own their own risk because when they set up their own Captive Insurance Cell they are taking action to responsibly rate and insure their exposures. Self insurance can refer to clients who simply do nothing, just cross their fingers and hope that the loss will never happen. That is not a strategy, that is not a way to face the future.
When client’s open a Cell Insurance Company with Hartwell, they are doing so much more than just self insuring. They are setting up an efficient way of managing their own risks, they are setting aside a fund to pay future claims and they are doing all of that using Hartwell’s Insurance experience and our actuarial, legal and Captive Management Team. They truly have decided to own their risk.
So the next time that someone asks me if having a captive Cell with Hartwell is ‘self insurance’ I’m going to say: ‘No, it’s all about the moment when the client decides to ‘Own their risk’.
April, 11th 2023. Nashville