National claims and risk management service provider Avizent has launched Restaurant Franchise Captive Program II, a risk-sharing captive for restaurant franchisees covering all lines of business – workers’ comp, auto liability, general liability and property. The program is backed by a national A-rated carrier, which issues the policies and provides the reinsurance. Avizent is also partnering with Concordis Group Inc., a financial holding company, to share the risk for the new restaurant captive.
“Our newest program highlights the reality that captives today are not just for the hard market,” notes Rick Stasi, chief operating officer at Avizent Alternative Risk.
Under Avizent’s first restaurant captive program, participants assumed all of the risk. The new program offers two options based on the level of risk. With the “Entrée” option, participants assume 100% of the risk, and in return, secure profits returned if the program is well-managed. The “Appetizer” option gives participants the opportunity to share one-third of the risk, along with Avizent and the broker, and secure the potential of receiving 50% of the profits returned from premiums.
Avizent’s original captive for restaurant franchisees was launched in 2004. The program has returned $9.1 million – about 40% of what was paid for premiums – in profits for participants. Due to strong underwriting and claims administration services, as well as safety programs and fraud detection, this captive has averaged a 15% loss ratio since its inception.
Avizent is also partnering with United Alternative Risk Insurance Solutions, LLC, an affiliate of United Agencies, to bring the captive to the national marketplace. Unlike the original program, which was offered only through United brokers, the newest program will be offered by other brokers nationwide who have experience in the captive market and restaurant industry.
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