Contributing Author: Mark Queen
Faith-based entrepreneurial navigator and founder of Core Score, LLC.
As the principal and CEO of Core Score, I can tell you that business leaders are growing more frustrated with significantly increased rates in property and casualty premium.
Case in point, Aen.com claims, ‘General liability rates in the U.S. rose 5.6% in Q4 2025 and are forecast to climb up to 9% in Q1 2026.’
Let’s look at relative factors driving rate hikes and what experts deem is a “perfect storm” of conditions:
- Inflation costs being passed to consumers
- More cost and time involved with auto insurance claims
- Reinsurance costs being passed to consumers
- Climate change causing increased risk
- Insurance carriers leaving the state or market
- More claims and/or litigation from consumers
- Changes in consumer behavior
Alternative Strategies and Actions
In the ever-evolving world of insurance and risk management (and given the above dynamics), business leaders seek innovative ways to mitigate risk, manage costs, and maximize the return on their insurance investments. One popular approach is a Privately Owned Reinsurance Company (POIC). Let’s explore why a POIC may be an excellent decision for your business.
What is Private Insurance?
Private insurance — also known as self-insurance or reinsurance — is a smart strategy to fill gaps in commercial insurance while unlocking powerful planning benefits. Rather than paying premiums to an outside insurer and never seeing that money again, business leaders insure their own uninsured and under-insured risks.
For businesses doing at least $1 million in annual gross revenue, this structure opens the door to risk mitigation, improved cash flow, asset protection, and long-term wealth accumulation.
How the structure works
Step 1: The business expenses premiums to a third-party insurance company that they do NOT own.
Step 2: The third-party carrier reinsures a portion of that risk and premium to an insurance company the business owner DOES own.
Step 3: Funds are held for potential claims. Net of any claims, the business owner’s insurance company participates in the underwriting profit.
Six core components of private insurance
- Privately Owned — The business leader owns and controls the insurance company
- Risk Aligned — Coverage is tailored to actual, assessed business risks
- Improved Cash Flow — Premiums stay within reach rather than lost to outside carriers
- Asset Protection — Shields business assets from exposure
- Wealth Transfer — Builds long-term, transferable wealth
- Tax Advantaged — Premiums are deductible as business expenses
Key Benefits At a Glance
- Tax Deductibility: Premiums are deducted from top-line revenue as a business expense
- Cash Flow Improvement: Premiums are accessible after a 30-day risk transfer window
- Asset Protection: Builds a long-term, privately-owned financial asset
- Flexible Use of Funds: Premiums can be used for reserves, loans, investments, warranties, and dividends
- Claims Control: Business leader decides if and when to submit claims
- No Government-Regulated Caps: No contribution limits, reserve requirements, or market performance ties
SUMMARY
While we know 92% of Fortune 500s use some form of reinsurance, we also understand that small to middle-market businesses are the backbone of the American economy. From agribusiness to transportation, reinsurance serves business leaders in every industry in all 50 US states. The private insurance industry – representing $800 billion in assets – provides a strategic element in long-term business plans and provides peace of mind; it ensures entrepreneurs have a dedicated asset base to address business risks while building up tax-advantaged premium in a dedicated structure.
Core Score’s Recommendation: The Latitude Plan™
A properly structured private insurance company gives you something the traditional market rarely does – control. Control over risk selection, claims timing, capital deployment and long-term wealth strategy.
By insuring uninsured and underinsured risk exposures through actuarially supported policies, you’re no longer just paying premiums – you’re repositioning them as a financial asset.
Across industries, Reinsurance Specialties™ clients adopt this best practice model – The Latitude Plan™ – to enhance risk management, mitigate losses, protect enterprise value and create a disciplined pathway for capital growth and generational wealth transfer.
Invitation
If your organization generates between $1M and $1B in annual revenue and is interested in learning more about private insurance and how The Latitude Plan™ may support your broader risk management strategy, we invite you to explore further.
You can review additional information here, or schedule an educational, no-obligation ZOOM call with the Reinsurance Specialties™ team to determine whether this approach aligns with your business objectives.
Every private insurance platform works a little differently, and this information is for educational purposes only. As seasoned private insurance professionals, Reinsurance Specialties™ can provide more detail, share our best practice model and deliver consultative guidance for your specific needs.