How the tool works
The captive design tool compares two ways of paying for the same risks: buying commercial insurance, or forming a captive (an insurance company you own) and keeping part of the risk yourself. This page explains how it reaches its answer, and where its limits are.
What you enter
Your size on each line: gross sales for general liability, payroll for workers' compensation, insured values for property and revenue for cyber. If you have them, add your claims history and what you pay today. Where you leave something out, the tool uses published industry benchmarks and tells you so.
What it calculates
The commercial side: what insurers would charge for your risks. It starts from industry rates and adjusts them for your own claims record, where that record is large enough to count.
The captive side: the losses you would keep, the cover you would buy above them, and the running costs. Those include fronting, management, taxes, and the capital a regulator requires.
The alternatives: guaranteed cost, a retrospective plan and a large deductible on the same lines. That way the captive is measured against realistic options, not only against today's policy.
Separately, a loss-control plan: what specific safety programs would save, what they cost, and how the result changes under each structure.
How to read the result
The headline is the yearly difference in total cost of risk between the captive and commercial insurance, worked out the same way for both. Around it the tool shows a range of good and bad years, the capital the captive would need, and how exposed it would be to a run of bad years. If a captive doesn't come out ahead for your business, the tool says so plainly.
The limits of the estimate
It's a pre-feasibility estimate. A captive needs a formal actuarial feasibility study before it can be licensed. This tool is a step before that, not a substitute for it.
It's before income tax. Tax treatment depends on your entity structure and needs a tax adviser.
Some inputs are judgment. Where public data is thin, the tool uses stated judgment values, and the results move when those change. Examples are fronting terms, claims-handling costs and how large losses behave.
Market terms vary. Fronting fees, minimums and collateral differ by carrier, and a broker's quote will differ from the tool's typical terms.
It's not a quote or advice. Only a licensed broker or insurer can price your program. The tool gives no legal, tax or investment advice.
Access
Access is by invitation while we test the tool. Questions about the method? Talk to us first.