Category: Blog

  • Loss Ratio:

    Loss Ratio:

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    Loss ratios are calculated by dividing the total losses paid by the captive by the total premiums earned by it. Example: • If a captive earns $1 million in premiums and pays out $500,000 in claims, its loss ratio would be 50%.

  • Long Tail Losses:

    Long Tail Losses:

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    Losses or Claims that pay out very slowly, with Loss development. These are losses that arise from events that have a long latency period or a long settlement period. EXAMPLE: • Asbestos claims, exposure to coal dust.

  • Liability – Motor Policy:

    Liability – Motor Policy:

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    Insurance taken on the vehicles used in business. Example., Trucks, Cars etc. The losses are in connection with accident and damage to the vehicles. Example: • Suppose you own a trucking company and one of your drivers causes an accident on the highway, injuring another driver and damaging their car. Liability-Motor Policy cover the medical…

  • Homogenous Group Captive:

    Homogenous Group Captive:

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    A homogenous group captive is a type of group captive insurance that involves multiple companies from the same industry. Group captive insurance is a form of self-insurance where a group of companies form and own their own insurance company to cover certain risks. By joining a homogenous group captive, the companies can benefit from having…

  • Heterogenous Group Captive:

    Heterogenous Group Captive:

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    A heterogenous group captive is a type of group captive insurance that involves multiple companies from different industries. Group captive insurance is a form of self-insurance where a group of companies form and own their own insurance company to cover certain risks. By joining a heterogenous group captive, the companies can benefit from risk diversification,…

  • General liability:

    General liability:

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    This type of insurance covers the risk of being sued by someone who is injured or suffers property damage because of the business activities.Example: • If a customer slips and falls on the wet floor and breaks his arm, he can sue for medical expenses, pain and suffering.

  • General Liability Insurance:

    General Liability Insurance:

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    General liability is a type of insurance that covers claims related to bodily injury or property damage caused by the company’s actions or negligence. Example: • A company’s delivery truck damages a customer’s garage door. The general liability would cover the cost of repairs or replacement.

  • Fronting commission:

    Fronting commission:

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    Commission paid to the fronting insurer for fronting the insurance business. The fronting insurer is the original insurer with whom the parent takes the insurance and then captive takes reinsurance from the fronting insurer. Example: > If a captive pays 10% of the premium to a fronting insurer for issuing policies on its behalf, this…

  • Escrow Account:

    Escrow Account:

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    Bank Account maintained with the third party to meet the claims payment requirement. EXAMPLE: • An Escrow Account is a third-party account that collects and pays your homeowners insurance and property taxes on your behalf.

  • Commercial Auto Insurance:

    Commercial Auto Insurance:

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    It is designed to protect business from financial losses that may arise from accidents involving commercial vehicles. Commercial Auto Insurance can cover a wide range of vehicles, including delivery trucks, work vans, dump trucks, food trucks, service utility trucks, and box trucks. EXAMPLE: • If a business owns a fleet of delivery trucks and one…