Icon (Close Menu)

Logout

Baptist Health Forms Insurance Company

2 min read

Baptist Health of Little Rock has created an insurance company to handle its general business insurance.

Diamond Risk Insurance LLC, a wholly owned subsidiary of Baptist Health, is Arkansas’ first special purpose captive insurance company, according to a news release from the Arkansas Insurance Department, which approved the company on Tuesday.

Diamond Risk will “help us with the self-funding we do for several of our coverages, including liability coverage, including workers’ comp for our employees,” Bob Roberts, executive vice president of Baptist Health, told Arkansas Business. “It’s not health insurance.” 

Baptist Health self-funds its health insurance, and uses the claims administrator Health Advantage, which is co-owned by Arkansas Blue Cross & Blue Shield and Baptist Health.

AID spokesman Ryan James said one of the benefits of a company creating its own insurance company is avoiding paying administrative costs to a third-party administrator, which is what a company would do if it were self-insured.

By using Diamond Risk, Baptist also doesn’t have to go through the annual process of renewing its insurance, “and putting themselves at risk of maybe one year it increases only a little bit and the next year it goes up a whole lot,” James said. “It basically allows them to control costs.”

Roberts said it was hard to predict how much Diamond Risk would save Baptist.

“We think it’s going to help us manage and stabilize our insurance costs and risk management costs over time,” he said.

Roberts said Baptist had been working to develop the insurance company for about a year and a half.

Founded in 1920, Baptist Health is one of the state’s largest private companies. Its 2014 revenue was up 13.5 percent to $954.4 million. It also had more than 8,000 employees.

Send this to a friend