Detail Surviving Soaring Insurance Costs   Oleh:  Banham, Russ Jenis: Article from Bulletin/Magazine Dalam koleksi: Journal of Accountancy vol. 193 no. 5 (May 2002), page 69-74. Topik: INSURANCE; surviving; soaring; insurance costs Ketersediaan Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ85.14 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada     Lihat Detail Induk Isi artikel Because of fallout from the September 11 terrorist attacks, property and casualty insurance premiums are soaring - doubling and even tripling in some cases. But not all businesses have to dig that deeply into their pockets to pay for adequate coverage. Savvy organizations are forming their own insurance companies so they can not only get reduced premiums but also can access economy - priced reinsurance. CPA s should consider advising their clients about the technique and should apply it to their own firms as well. The destruction of the World Trade Center site caused billions in insured property losses - the single largest insurance hit in history. To replenish lost financial capacity, insurers are raising prices an average 30 % to 40 %, although premiums for some lines - such as policies for high - rise office buildings, aviation and business interruption - are likely to double and even triple. Insurers also are forcing buyers to retain more risk themselves. Basically, if an insurance policy carried a $10,000 self - insured retention (similar to a deductible on car insurance), this will jump to about $25,000 when the policy renews. If there was no self - insured retention, as is the case with many workers’ compensation policies, there definitely will be one upon renewal. To cope with the higher premiums and elevated levels of retained corporate risk, many businesses are turning to alternatives, chiefly “captive” insurance companies - that is, insurance companies owned by the organizations they insure. The insured pays its captive a premium to absorb the risk of loss and puts capital in reserve to cover any losses. The advantage of a captive is not only generally lower costs, but it offers its corporate owner a way to gain greater control over its risk exposures by providing a financial incentive to reduce loss - that is, if losses are reduced the captive will make a profit for its owner - the insured. “That was our intent when we formed a captive last year,” says Francis Galligan, CFO of the Roman Catholic Diocese of Brooklyn, New York. Galligan oversees the business affairs of 220 parishes and several cemeteries and hospitals. Before forming the captive, the diocese’s policy called for it to absorb the first $100,000 in potential property losses and the first $250,000 in potential liability losses, paying these losses out of cash flow. Galligan now insures the retained risk through the captive, which buys reinsurance to transfer the higher - level risk. "This is a very sophisticated way of managing our retained risk,” he says. Opini Anda Klik untuk menuliskan opini Anda tentang koleksi ini! Kembali

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