Evolution of Insurance - Risk Management and Insurance, Principles of Insurance Video Lecture | Principles of Insurance - B Com

insurance is the tool business owners
rely upon to protect and reduce the
effects of risk on a business's four key
asset employees clients profits and
brand reputation
the first known practices of insurance
the transferring or distributing of risk
dates back to Chinese and Babylonian
traders in the second millennium BC
goods were distributed amongst many
vessels to reduce the potential total
loss due to a single boat capsizing the
concept of risk distribution continues
to develop
and today represents the approach used
by most traditional insurance carriers
risk distribution can be defined as the
premiums of the many pay the expected
losses of the few traditional insurance
carriers determine rates and premiums
based upon historical collected premium
and paid losses and expenses in essence
the good risk offset the bad risk
however this type of business model does
not favor best-in-class risk and is
costly for businesses with good claims
history not only do best-in-class risk
pay more in premiums than they should
these traditional arrangements also lead
to a loss of 100% of a profitable risk
risk capital also referred to as the
underwriting profit generated by
favorable loss history is there an
alternative for best-in-class businesses
who would like to own their insurance
program profit group captives were
created in the 1980s to provide
best-in-class small and medium-sized
businesses SMBs with the opportunity to
own the profits in their insurance
programs group captive programs are
actively being utilized by best-in-class
risks to build asset reserves with
pre-tax dollars to fund for losses as
well as to facilitate the contractual
return of underwriting profit
an investment in come back to group
captive owners unlike traditional
Insurance Group captives only accept
good risk the primary benefit of group
captives for best-in-class SMBs are
control and reduce insurance cost
premium calculations are based on group
members actual loss history not on
industry averages access to customized
risk management and loss prevention
services tailored and designed
specifically for group captive owners
underwriting profits and investment
income accrue to the benefit of captive
members best-in-class SMBs o rather than
renter insurance programs
entrepreneurial best-in-class business
owners paying annual premiums in excess
of $100,000 now have the ability to
convert their traditional insurance
programs into profit centers using a
process designed to greatly enhance
trust transparency and customer
experience savvy consumers are seeking
an alternative to traditional insurance
as well as stability and continuity why
continue to rent when you can own the
profits in your best-in-class insurance
program contact the group captive
experts at the Beacon Group today at six
one zero two six five four zero one two
or visit our website at the beacon GRP
com
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