Turn to captives amid hardening workers compensation marketPosted On: Mar. 14, 2012 12:00 AM CST
Expect to see more employers use captive insurers to cover their workers compensation risks as commercial insurers continue raising their pricing for that line.
That was the buzz at the Captive Insurance Companies Association's annual International Conference I just returned from.
Recent reports show insurers have been raising their pricing for workers comp coverage. For example, a recent Towers Watson & Co. survey revealed that work comp coverage pricing rose an average of 4% to 6% during the fourth quarter of 2011.
As prices rise, Stephen B. Paulin, senior vp for broker Sullivan Curtis Monroe Insurance Services Inc. in Irvine, Calif. told me at the conference he expects to be educating more middle-market clients about captives as an alternative to insurance purchasing.
He wasn't the only one I heard similar comments from.
Workers comp risks typically are one of the main risks employers place in captives before expanding their captives to cover other lines. More information on placing workers comp risks in captives as insurance prices rise can be found in a Business Insurance story available here.