ARU was approached by a group of agricultural companies during the height of the Worker’s Compensation crisis in California in 2002-2004. In July 2003, a broker asked us to create a group captive for some of their clients involved in agribusiness, a market for which coverage had really dried up for at that time. From July to October we collected and analyzed the clients’ loss data, determined the pricing, designed the captive, approached a fronting company, and interviewed the claims TPA and other service providers.
By mid-December, we completed work on the captive and licensed it as a multiline insurer, providing workers compensation, general liability, and commercial auto insurance. If a broker has really good data from the outset, it’s possible to create a group captive in as little as 90 days.
ARU was asked to create one of the first group captives in Canada for the commercial trucking industry. There are very few insurance companies in Canada that will write commercial trucking coverage, and even fewer still that are interested in writing Canadian truckers with significant U.S.A. exposure. In association with our Canadian broker partners and trucking company members, ARU launched a specialty group captive that offers a true alternative market solution for above average commercial trucking companies in Canada with significant mileage exposure in the United States.
ARU has also developed alternative market, group captive solutions for the construction, manufacturing, service, and distribution industries.
One group captive member in the agricultural business made significant capital improvements to automate a formerly manual processing facility. The manual processing facility was the source of a disproportionate number of worker’s compensation cases that also had a negative effect on their worker’s compensation experience modification. ARU worked with the member to offset the increased cost and recognized the capital improvements in their pricing up-front. This provided significant savings over conventional insurance approaches; their loss experience improved and captive profits were greatly enhanced.
A commercial trucking company that works with an ARU group captive program improved their loss ratio by over 75% in three years by taking advantage of the unbundled services and control offered by the program.
A commercial contractor that works primarily in the street & road construction business has maintained a loss ratio under 10% over a four year period with their group captive. They have been motivated by the strong profit potential and better services available to control their claims and exposures.