Captive Insurance – own a share of your own, profitable insurance company

Odell Studner and Profit Focus CFO worked together in support of a mutual client to explore the use of captive insurance. At that time, the client, a Philadelphia based heavy industrial contractor was using traditional insurance, had a good understanding of importance of implementing a high level of safety and of trying to manage claims carefully.  But they were frustrated that their insurance premiums kept increasing – as though they were being punished for the sins of less careful customers of traditional insurance.

So, at the urging of Vince Leusner and Profit Focus CFO, Odell Studner was invited to make a presentation about the benefits of captive insurance.  Over the course of some months, we further educated the mutual client regarding captive insurance. In 2012, the client decided to enter the captive – to effectively become an owner of an astutely run entity, that utilizes every sophisticated tactic and employs only the best consultants as advisors.  Much the same as publicly traded insurance behemoths.

Over the course of the next 7 years, the usage of the captive, and the financial results which accrued to the client who entered the captive could not have been better. Premiums were relatively low because the client continued with the adherence to a strict safety program and they were wise in their management of claims.  And as a reward for this performance, the client built up over $2.5 MM of equity in the captive, effectively their share of the profits that a traditional insurance company might have earned as they were effectively such a profitable client.

In some years the insurance part of the business was more profitable than the contracting part of the business.  It worked like a charm thanks to a dedicated, well behaved client and the partnership that was forged between the client, Odell Studner and Profit Focus CFO.

Vince, from Profit Focus CFO was our main contact and together we administered the insurance program. The client would provide us with every piece of information that we needed to service the account, in complete detail and on a timely basis – we communicated constantly to address risks, exposures or opportunities that might present themselves.  This cooperation allowed us to be conversant in their business, to be very familiar with their clients and their projects.  And, I think that the client would give Odell Studer high marks in our support and our customer service.

If you need a high-level financial resource to help you optimize your business, you should touch base with Vince – after all look what he helped us do for our mutual client.

Odell Studner website