Many types of insurance fit within the category of Performance Based Insurance (PBI). Some of the names may be familiar to business executives, while others might come as a surprise: Risk Retention Group Baseball Retro Retention Plan Pure Captive Self-Insured Retention Plan Paid Loss Retro Participating Dividend Plan Safety...

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Bob Phelan describes successful workers’ compensation programs in terms of a three sided triangle, with a focus on rehabilitating injured workers and returning them back to work: Safety Injury Management PerformanceBased Insurance™ Last year, Phelan recommended that a regional chain of nursing home facilities depart from a traditional subsidized...

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Captives, a better known type of Performance Based Insurance, are becoming increasingly popular as an insurance vehicle for many companies, large and small. Approximately 30 US states have passed laws allowing captives to be formed in their jurisdictions. Vermont, which allowed the first on shore captive to be formed,...

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Performance Based Insurance offers a compelling ROI for many companies, and will transform the insurance landscape in the coming decade. Safety conscious companies will typically reduce their insurance premiums 25% to 50%. The best in class performers can reduce premiums more than 50%. Let’s look at an ROI scenario...

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Can you fire an employee from your business while they are out on a Workers’ Comp claim?  Yes…but be careful and cross all your t’s and dot all your i’s before you do! You can terminate a workers’ comp claimant as long as they are not protected by any...

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Safety can no longer be viewed as a “nice to have” extra, provided only if it’s convenient. Rather, promoting safety-and its cousin, wellness-needs to be a core strategic initiative for middle market companies that aim to thrive well into the 21st century.  Too often, we see or hear about...

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Companies using traditional insurance, also referred to a Subsidy Based Insurance (SBI), encounter all of the following problems: Subsidize your unsafe competitors No control of your insurance destiny Subject to unpredictable market swings Insurance company earns the financial rewards Constantly out to bid to keep system honest No underwriting...

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In the past, we’ve discussed some of the major problems caused with Subsidy Based Insurance (traditional insurance). Here is a list of some of the major advantages of Performance Based Insurance: Little or no subsidy to others Control your insurance destiny Eliminate unpredictable premium swings You earn the financial...

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It costs roughly 35 cents of every premium dollar to run an insurance company. That’s overhead. It pays for underwriters, actuaries, lawyers, claims personnel, marketing staff, etc. That leaves 65 cents to pay the claims for a traditional insurance company. But claim payments aren’t distributed equally to the policyholders....

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A few hundred years ago, when insurance was “invented” in Edward Lloyd’s coffee house (now known as Lloyd’s of London),  ship owners sat over coffee and decided how they would share risk. Essentially, a mini-insurance company was formed for every voyage. Imagine if a ship owner or its captain...

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