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What is a Captive?
A Captive Insurance Company is a formal and efficient method of self-insurance. It finances and insures retained business risks of its shareholder/owners. The AgriCap Group works with an entity to create a captive insurance company; the entity is the owner of the captive insurance company and controls all of the insurance programs of the newly formed captive insurance company.
Benefits of Captives for Farms
- Customized insurance solutions to meet the risk management needs of the owner and their farm
- Helps the owner achieve financial performance goals while protecting against catastrophic risks and losses
- Allows the owner to benefit from the captive insurance company’s underwriting profits
How Does a Captive Work?
AgriCap works with you to create a captive insurance company for your farm that you own and control. We work together to develop a policy that covers the risks that you desire to cover. The policy is then written, rated, and reinsured through the captive insurance company. You (owner) pay premiums to the captive insurance company in exchange for the captive insurance company assuming the risks identified in the policy. If you suffer a loss, the captive insurance company pays the claim to the owner per the terms of the policy. If you do not suffer a loss, the captive insurance company keeps the excess of the premiums which, when earned, is added to the captive insurance company’s capital each year there is no loss. The captive insurance company also earns income by investing premiums that it receives until it uses those funds to pay any claims.
Can my Farm Benefit from a Captive?
Historically, captives have been used by large corporations. Today, captive programs are available for individual farmers and local agribusinesses. Producers can profit from owning their own insurance company using proven, secure captive structures and programs. This risk management solution is growing fast within the Agricultural Industry.
A captive can be used to insure a number of risks that farmers face, including crop insurance, farm property, product recall, environmental issues, workers’ compensation, auto liability and general liability.
Your farm may benefit from a captive if ANY of the following apply:
Farms and Farm organizations with over 10,000 acres
High Value Crops
Farms with High Valued Crops
(Nuts, Fruits, Citrus, Vegetables)
Annual gross revenues in excess of $6,000,000
Farms spending over $200,000 annually on insurance premiums
Our captive insurance company has improved our ability to manage our risk by customizing and enhancing our insurance coverage for our operation while reducing our cost of insurance and improving our financial performance.
Minnesota Farm Manager
Our process typically takes from 60 to 90 days depending on the data available and response time of all involved parties.
Entity Education & Execute Non-Disclosure Agreement (NDA)
Data Gathering / Risk Management Program Development
Captive Application and Approval
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5900 Rowland Rd, Minnetonka, MN 55343
+1 (952) 746-4353