Alternate funding presents numerous advantages tailored to modern business needs, particularly in industries subject to frequent fluctuations and uncertainties.
KEY BENEFITS
- Cost Efficiency
By analyzing claims history and risk profiles, business owners can secure more favorable premium rates. Many organizations can see savings ranging from 20% to 50%. This is highlighted in our Kapnick case study, below, where a client saved over $300,000 in premiums. - Enhanced Control and Flexibility
With alternate funding models, businesses can tailor insurance solutions to match specific risk exposures and operational needs. This hands-on participation by decision-makers in assembling their coverage ensures that their expertise is taken into account when designing risk management policies and procedures.
- Stability and Predictability
With alternative funding models, businesses can achieve more consistent premium costs, allowing for improved budgeting.They can also be sheltered from some of the impact of volatility that customers experience in the traditional insurance market.
BEST PRACTICES FOR IMPLEMENTATION
Ready to pursue alternate funding models? To maximize the benefits of alternative funding, be sure to follow these best practices:
- Engage Experts Early
Consulting with insurance experts early in the evaluation process can lead to more informed decisions tailored to unique circumstances. - Regularly Review Risk Profiles
Ongoing assessments of risks ensure that coverage remains aligned with business developments and changing environments. - Invest in Education and Training
Ensuring that all stakeholders understand the intricacies of alternative funding can empower them to make proactive decisions related to risk management.
THE ROLE OF TECHNOLOGY
Embracing technology can streamline the implementation of alternative funding strategies. Here’s how:
- Data Analytics: Advanced analytics tools can provide insights into risk assessments and claims history, driving informed decision-making.
- Risk Management Software: Implementing software solutions can offer ongoing monitoring of risks and facilitate timely responses.
A KAPNICK CASE STUDY
A Kapnick client averaged $600,000 annually for their casualty insurance premiums, including general liability, workers’ compensation, and auto. This best-in-class company averaged less than $100,000 in claims, yet despite their outstanding loss history and safety programs, and Kapnick’s aggressive marketing, they were unable to reduce their premium costs. They were already receiving the best premium available the fully insured marketplace was willing to offer.
Fortunately, Kapnick’s analysis showed that by pursuing an alternative risk program, they could reduce insurance costs by 50%. This has resulted in $300,000 in dividends annually back to the client.
CONCLUSION
In an evolving business landscape, exploring alternative funding for insurance is not just a financial strategy; it’s a pathway to resilience. By harnessing the benefits of these innovative models and undertaking a thoughtful implementation process, companies can create robust risk management frameworks that not only protect their assets but also support sustainable growth.
For tailored guidance on navigating these alternatives, reach out! We would love to help you explore your alternatives. We’re available at or 888.263.4656 for more information.
