They've been buying insurance the same way for the last fifteen years. Of course, they're going to look at two numbers and pick the lower one. That's what they've always done. And if you let them compare it that way, you've already lost the conversation.
Your job is to change what they're comparing.
Here's the question that reframes everything. How much of what you've paid in premiums over the last ten years has ever come back to you?
They know the answer. Zero. Every dollar went to a carrier, and they never saw it again. Good years. Bad years. Didn't matter. The check was left, and nothing came back.
Now you can ask the second question. What if you were investing in yourself instead?
That's the conversation. Not a price comparison. An investment comparison. Because that's what a captive actually is. Your client is putting money into something they own, where their performance determines their return. If they manage their risk well, that money comes back with interest. If they have a year with claims, that year stands on its own, and the others still earn.
Now here's what Warren says about the cost question directly. If you're going to include a captive number alongside a traditional renewal number, save yourself the trouble. It's going to be more. The captive is almost always going to cost more in year one. So don't be surprised by that and don't hide from it. Take it away from them.
Tell your client upfront: yes, this will cost more than your renewal quote. Here's why. You're not just buying insurance anymore. You're buying a share in an insurance company. You're funding a reserve that is yours. You're investing in your own performance. And when you perform well, which your history says you will, those dollars come back to you.
The business owner who is the right fit for a captive already knows the traditional market hasn't been fair to them. They've watched their premiums go up despite clean losses. They've been subsidizing someone else's bad performance. When you show them a different model, one where their results actually drive their costs, the price conversation changes completely.
You're not asking them to pay more for the same thing. You're asking them to invest in something entirely different.
It's always your client. Never ours.