Key Insurance Strategies for 2025

2025 Goals Set? Business Plan Completed? Resolutions in Full Swing?

I’ll bet you a nickel that “Insurance Strategy” didn’t even make it onto your focus list. Yet, if you’re like most folks, you probably spent a fair chunk of 2024 complaining about insurance.

Some of my favorite Q4 complaints include:

• “Insurance is too confusing!”
• “We pay too much!”
• “Carriers keep all the profits!”
• “Do we even need all this coverage?”
• And the crowd-pleaser: “Underwriters don’t know $#!% about our industry!”

Valid complaints, mostly. Don’t worry—you’re in good company. Insurance tends to rank right up there with root canals on the fun scale. And while you might love me (aww, thanks!), the industry is less than desirable.

But here’s the deal: you can make insurance work for you instead of against you. Let’s dive into three strategies to help you rethink Property and Casualty Insurance in 2025.

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Strategy #1: Explore a Captive

Want to reduce costs, keep underwriting profits, and stabilize pricing? Of course, you do. Add “reducing taxable income” to the list, and Captive insurance might just become your new best friend.

Captives, both domestic and foreign, have been around for over a century, offering tailored solutions for Property and Casualty risks as well as Employee Benefits (hello, self-funding!). While Captives aren’t for every company, if your business is well-capitalized and looking for tax efficiency, they’re worth a serious look.

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Strategy #2: Self-Insure Low-Risk Hazards

Newsflash: just because an insurance product exists doesn’t mean you need it. (Shocking, I know!) If your risk of, say, a product recall is negligible, why not self-insure that exposure?

The same logic applies to certain liability risks. If history says your product won’t cause bodily injury or property damage, you might consider self-insuring that risk. Just remember: if a contract requires proof of insurance, you’ll still need some coverage. Which brings us to...

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Strategy #3: Establish Coverage with High Self-Insured Retention

You’ve heard of deductibles, but let’s talk about their fancy cousin: self-insured retention (SIR). With an SIR, you handle liability claims up to a set amount using your own legal counsel before the insurer steps in.

Why should you care?

1. Lower Insurance Costs – The carrier’s not covering defense costs until you hit the SIR.
2. Preserve Your Coverage Limit – Unlike deductibles, an SIR doesn’t erode your policy’s liability limit. For example, if you have a $2M policy with a $200K SIR, you still have the full $2M once the SIR is met.

For companies with a solid balance sheet, an SIR is a savvy way to save while maintaining robust coverage.

Will these three strategies make you fall head over heels for insurance? Let’s be real—probably not. But they will give you a fresh perspective on managing risk and (dare I say) make you look like the insurance genius in the next Board meeting.

Ready to take control of your 2025 insurance strategy? Let’s chat. Call me, email me, or send a carrier pigeon—I’m here to help.