What is the biggest misunderstanding about captive insurance?
Owners do not think about insurance, and the people who do are not paid to raise it
Queen locates the misunderstanding in two places at once. Most owners file insurance alongside the retirement plan as an administrative line item and never examine it. And the advisers who could raise a captive are frequently not trained to spot the opportunity, or are not paid well for it when they do.
The first half is about attention. Insurance is not interesting to most chief executives, so it goes in the same bucket as the retirement plan and the health plan, something a broker handles. Opportunities get missed simply because nobody is looking.
Key takeaways
Queen says owners treat insurance as an administrative line item, which is why captive opportunities go unexamined.
He frames the adviser problem as incentives rather than competence, and is explicit that many brokers know the subject better than he does.
His model adviser uses a captive selectively, for the risks the conventional market handles badly, rather than proposing it everywhere.
The second half is more uncomfortable, and Queen is careful with it. He says plainly that plenty of brokers are smarter than he is and could school him on captives, so this is not a competence claim. It is an incentive one: a captive placement does not always pay a broker as well as the alternative, and it is hard to get anyone to understand something they are economically incentivised not to understand.
From the conversation
Matt Queen
Captive Insurance Attorney, author of Modern Captive Insurance
“I don't think that the insurance brokers are adequately trained to identify captive opportunities.”
This answer begins at 39:00 of the full conversation. Watch or listen to the whole thing.
The views expressed are those of the featured guest, drawn from a recorded conversation, and reflect their own professional experience. Nothing on this page is insurance, tax, legal, or investment advice. Consult your own advisors about your specific situation.
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