Which alternative risk management option may customers consider?

Customers looking for alternative risk management options often find the concept of a captive insurer appealing. A captive insurer is a type of insurance company that is created and wholly owned by one or more non-insurance companies to insure the risks of its owners. This approach allows businesses to keep their insurance costs under control and tailor coverage specifically to their needs, which can lead to significant financial benefits.

By establishing a captive insurer, customers can retain more control over their risk management strategies and potentially create a more efficient way to manage risks that might be challenging to insure through traditional means. Additionally, captives can provide benefits such as tax advantages, better cash flow management, and a more direct relationship with the underwriting process.

In contrast, buying more conventional insurance limits customers to the offerings of external providers, taking no actions towards risk might expose them to higher potential losses, and relinquishing all insurance policies places them at significant financial risk without any safety net from insurable events.