Work Comp Deterioration Will Bring More opportunities for Captives, Delaware Business Insurance Update

Work Comp is problematic. Rates are going up because profitability in the line is going south. Medical costs are also escalating. Employers are feeling helpless and are looking for more control. So this becomes a great opportunity for captive growth. Employers are going to look hard at forming their own captives or getting into group captives in an effort to gain some control over work comp. In captives, employers can establish medical cost saving strategies with medical providers. In captives, employers have a say in claim payouts and settlements. In captives, employers can establish risk management practices that can affect their over all costs. Captives will give employers a chance to stop the madness in work comp. However with more control comes more risk. Employers are not going to be able to escape the risk issues surrounding work comp. Captive programs are going to have to be structured with excess coverage that is going to have to cover over increasing severity. Time will tell if the growth of captives will out pace growth of guaranteed cost policies over the enxt decade. My guess is they will. Until next time be careful out there and know your risks. K

G. Kevin Nemith, Business Insurance, Small Business Insurance specialists, serving Delaware, Pennsylvania, Maryland, & New Jersey.
www.cncinsurance.com
www.bizinsurancetv.org

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