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Captive insurance: mitigating risk for employers and creating value for employees

In an era when economic pressures are mounting, it's prudent for employers to consider a different approach to providing insurance options to their employees. Delivering greater value to both employers and employees may require a non-traditional insurance plan. This is where a captive insurance model comes in.

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How is the captive model different than traditional insurance plans?

Captive advantage

  • 100% of employees receive optimized benefits and premiums.
  • 3x the premium dollars go back to employees.
  • Average employer distribution of premium is 20%.

Most insurance plans offer minimal transparency on claims utilization and value, but a captive plan can lift the veil on claims usage and premiums paid, by:

  • providing full transparency and accountability for every premium dollar paid.
  • prioritizing employee value.
  • providing enhanced benefits and pricing options to help drive utilization.

Employees choose coverage options that are suited for their families' needs and budgets. Employee-paid monthly premiums create a pool from which benefits can be paid for eligible claims. An annual dividend from leftover claim dollars can be paid back to the employer during the years when employees don't fully utilize their benefits; this dividend is then reinvested into employee benefit and wellness programs as mandated by the U.S. government.

Eligible programs include employee wellness initiatives, decision support technology, and financial wellness programs. The captive insurance model ensures that premium-paying employees are getting the most value out of their coverage.

Think about this

70% of employees believe that employers have a responsibility to safeguard workers' health and physical well-being.1

76% of employees say that access to insurance benefits is one of the reasons they work at their current job.2

The captive model in action

Here's an example of how the captive insurance model stacks up against a traditional insurance plan.

Table comparing a captive insurance model vs a traditional insurance plan

As shown in the table above, covered employees of a company with 2,000 employees could pay less in total premium, receive more in claims, and the business would still receive a dividend of $36,000 at the end of the plan year. The money can be used for employee health and wellness programs, technology initiatives, or financial wellness programs. This creates even greater value for the employees and their covered family members.

The Allstate Benefits advantage

Allstate Benefits partners with a captive insurance management company called BeneRe that specializes in implementing and maintaining captive insurance models. BeneRe helps manage risk, creates value for employees, and provides transparency around claims, commissions and expenses.

This approach takes the burden of plan administration off the employer while having no effect on the enterprise's bottom line.

At Allstate Benefits, employers can offer various voluntary insurance products in a captive plan. Are you ready to go captive? Talk to an Allstate Benefits Sales Executive today to learn how your clients can benefit from this revolutionary model! Visit Find a sales representative | Allstate Benefits and contact us using the Group Supplemental contact information.

1EBRI 2022 Workplace Wellness Study, October 2022

2In the World of Employee Benefits, Knowledge is Power, Employee Benefit News, 9/7/2023

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