In an effort to reduce costs, twenty-three southern Minnesota co-ops have formed an offshore, captive insurance company.
The newly formed company, Pillar Insurance Ltd., may be the first of its kind in the industry.
According to an article by The Associated Press, a captive insurance company is one that shareholder members own and operate. They are then able to control the cost of insurance but also assume a greater risk.
"We have seen our property and casualty premiums skyrocket in the last five years to the point where it's absolutely out of control and beginning to have a devastating effect on our company," Pillar chairman Jeff Neilsen told the AP. "We had to do something about it."
Captive Design, a Plymouth-based firm that helped establish Pillar, plans to market it to agriculture co-ops in other states.
Yahoo News, AP