The Advantages and Disadvantages of Group Self-Insurance

Advantages - Disadvantages 2.1.The Advantages of Group Self-Insurance (i) Low start-up costs. (ii) Minimum premium requirement is much less than for single company self-insurance. (iii) Greater Purchasing Power for Services and Reinsurance. (iv) Losses are diluted amongst all policyholders. (v) Greater need to control losses and costs as the administrator is responsible to all policyholders. (vi) Greater predictability of results due the larger base. 2.2. The Disadvantages of Group Self-Insurance (i) Less control over policy and coverage issues. (ii) Experience and future premiums can be impacted by the poor performance of another party. (iii) Profits are shared. (iv) Decision - making is slower.