Claims data nudges firms to fund benefits through captivesReprints
Employers say improving claims data was the key driver that led them to fund employee benefit risks through their captive insurers, according to a survey released Wednesday.
Forty-four percent of employers responding to the Willis Towers Watson P.L.C. survey said improving claims data to help with benefit cost management was the primary reason that led them to fund benefit risks through their captives, up from 24% a year ago.
Conversely, the percentage of employers who said cost savings was the main driver of their move to fund benefits through their captives dropped to 44%, down from 67% in 2015.
“There has been a clear evolution in the rationale for companies to include employee benefits in their captives,” Mark Cook, director at Willis Towers Watson in London, said in a statement.
“The initial motivation for using a captive is often the simple desire to save money on the ever-increasing cost of providing employee benefits. For some companies, these ongoing cost savings are all they require from their captive, but many are developing their use and finding additional benefits,” Mr. Cook added.
The survey, taken in May and June, is based on responses of 41 employers that now fund benefit risks through their captives.