Article

Case Study: Midwest-Based Liquid Bulk Fuel Hauler

A Midwest-based liquid bulk fuel hauler, recently completed its third captive insurance renewal with Captives Insure (C.I.). This milestone reflects the company’s commitment to leveraging innovative insurance solutions to achieve financial stability and competitive advantages in the fuel transportation industry.

Captive Insurance Structure

For this renewal, C.I. provided a $5 million lead umbrella policy with a gross written premium (GWP) of $1.2 million. The structure included a quota share arrangement, allowing the insured to retain approximately $800,000 within their captive for claims management. This approach ensures that this client retains control over claims handling while benefiting from underwriting profits.

Key Fatures of the Policy

• AM Best Rated Paper: Policies were issued on AM Best-rated paper, ensuring compliance with regulatory and contractual requirements. This guarantees financial stability and reliability in claim payouts.
• Broker Compensation: The broker contiued to provide coverage advice and was compensated 10% commission on the GWP, aligning incentives for effective risk management.
• Premium Stability: The captive structure provided consistent rates and premium stability despite fluctuations in the commercial insurance market.
• Underwriting Profit: Thanks to favorable loss history and effective risk management, this client has generated over $1 million in underwriting profit through its captive insurance arrangement. This surplus enhances the company’s financial resilience and supports reinvestment opportunities.
• Competitive Edge: The financial benefits derived from the captive structure have position the insured as a leader in its highly competitive industry. The ability to control costs and manage risks internally gives the company a distinct advantage over competitors.

About the Client

Founded in 2000, this account has grown from a single truck operation into a prominent liquid bulk fuel hauler serving multiple states across the Midwest and South Central regions of the U.S., including Kansas, Missouri, Oklahoma, Arkansas, Texas, and Colorado. With a fleet of 60 rigs and specialized equipment for transporting refined fuels like propane and jet fuel, this client is known for its commitment to safe, trustworthy, accurate, and reliable service.

Captives Insure’s tailored insurance solutions have empowered the client to achieve greater control over its insurance program while retaining significant underwriting profits. This partnership exemplifies how captive insurance can drive long-term financial performance and resilience for businesses in high-risk industries like fuel transportation.