Independent agents can help make up for declining premium growth in a soft market and a recessionary economy by helping clients create captive insurance companies, where appropriate, one alternative market manager suggests.
Indeed, a captive program can be a very profitable venture for those putting up the investment to fund the creation of risk retention vehicles for volatile exposure programs, according to Chris Kramer, senior vice president of Atlas Insurance Management, a management firm based in Washington, D.C.
A typical captive involves the owner of the risk setting up a self-insured program and providing adequate financing to cover the exposure, while buying reinsurance directly to back up the facility, Mr. Kramer explained during a presentation at the recent annual meeting of the American Association of Managing General Agents in Boca Raton, Fla.
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