insurance premiums on a 16 million dollar race horse

[petersd]

Hi FOS,

Self-insuring simply means that you elect not to carry any insurance at all. Therefore, you are assuming all of the risk. In some cases, that is the right way to go, but only after you have weighed premium costs against the potential for losses and the amount of losses you can reasonably afford to absorb. For example, one well-known California farm was paying over 50 cents on the dollar for it's workers comp insurance due to a high-loss rate. The farm elected to self-insure their workers comp (which can be done in CA if you have DEEP pockets), then covered themselves with a long-term care and catastrophic injury health plan.
I don't know of any Coolmore horses that are insured, as they would more then likely go through the London market. I do know the sheikhs usually don't insure (it helps when you own your own country), but did have one stallion insured that I know of - Dubai Millenium, who nailed the industry with a $40 million loss.
Roving Boy mentioned capacity on Smarty Jones. I didn't know it had been an issue during his racing career, but it was a HUGE issue when it came to writing the first-year infertility package. They had to put that thing together like a patchwork quilt to get it done.

[roving boy]

I the 80's Coolmore went from a standard first dollar insurance policy to a deductible, and then to self-insuring. As petersd said, self-insuring can be done in a formal fashion where the insured buys excess policies or catastrophic type policies (think an umbrella without underlying coverage), or it can be less formal where the insured either puts money into a reserve fund or simply accepts the risk as part of doing business.

Coolmore insured Fairy King prior to his infertility - the first policy they had purchased in some time. It was big news when that opportunity hit the Lloyds floor. I think they had a claim within a 12 month period...

[FOS]

hi petersd...hello roving boy

Thanks for sharing your thoughts and overviews...but I was hoping to get a clearer picture of the EXACT self-insurance process at Coolmore.

petersd...you wrote "Self-insuring simply means that you elect not to carry any insurance at all." Respectfully...that may be one example of self-insuring, but, you might agree, that self-insurance and no insurance are not necessarily always one in the same.

roving boy, when you wrote "Coolmore self-insures with a very few exceptions" it sounded (to me anyway) like you spoke with first-hand knowledge of Coolmore's insurance portfolio and strategy. If that were the case, I thought that maybe you could be more specific and possibly share the exact hows and whys re: Coolmore's self-insurance strategy...and how they select the "very few exceptions" (your words) that you referred to in your comment.

Thanks again.

Best to you.

Respectfully

[roving boy]

FOS:

I am reminded of a joke involving a preacher exhorting his congregation to cleanse their souls by confessing their sins in front of the entire congregation. As each member comes forward and speaks the preacher's response is:

"tell it all, tell it all!"

The punch line that follows the last such confession is:

"I don't think I woulda told that."

[FOS]

hi roving boy

I hear ya ...

Best to you.

Respectfully