A Market Worth Exploring: PCC Insurance for Medium-Sized Businesses

For more than a half-century, self-owned insurance companies, or captives, have provided large organizations an alternative to self-insurance. The evolution of rental captives enabled a pool of businesses to gain the advantages of self-owned insurance with a smaller capital commitment. The segregated cell insurance facility, or protected cell captive, was a further refinement. A PCC creates a separate underwriting account – a cell – for each participant.

What Are a PCC’s Unique Features?

Where permitted by local law, a PCC’s walled-off structure provides each member with several benefits:

  • Statutory protection from other participants’ creditors
  • Ease of entry and exit
  • More flexibility and control than traditional insurance

PCC participants typically experience smaller underwriting profits and losses than captive insurance owners. Along with lower entry costs, this predictability makes PCCs desirable for companies that are too small to set up a captive.

Who Are Ideal Customers for a PCC?

Businesses with some of the following qualities may benefit from a PCC:

  • Established corporations with stable balance sheets
  • Niche companies with hard-to-insure needs
  • Young and fast-growing ventures with exceptional capital backing
  • Companies looking to fine-tune their employee benefits

In permitted jurisdictions, PCCs are a customizable insurance solution for agencies to offer business clients. Joining forces with a specialized captive insurance wholesale broker could open up a highly desirable market for a local agency.