How captive programs work
The phases of forming a captive.
Feasibility & Design
Actuarial feasibility, lines to include, limits/retentions, and pro‑forma financials.
Domicile Selection & Licensing
Choose a domicile (e.g., VT, HI, Bermuda, Cayman). Meet regulatory capital and governance requirements.
Fronting & Reinsurance
Use a fronting carrier if admitted paper is needed; shape retained risk with quota share or excess of loss reinsurance.
Operations & Governance
Engage a captive manager, TPA, actuary, and auditor; implement board governance, policies, and reporting.
A Long-Term Commitment
A captive is a long-term risk financing structure for businesses with substantial annual premiums, stable loss history, and strong balance sheets. It requires capital, governance, regulatory compliance, and service provider coordination (captive manager, actuary, TPA, auditor).
Is a captive right for your business?
Captives work best for organizations with specific characteristics.
Ideal Candidates
- • Substantial annual commercial premiums
- • Stable, predictable loss history
- • Strong balance sheet & capital capacity
- • Multi-year planning horizon
- • Commitment to safety & loss control
- • Desire for program control & transparency
- • Hard-to-insure or unique risks
When Traditional Insurance Is Better
- • Volatile or unpredictable losses
- • Limited capital or cash flow constraints
- • Short-term cost focus
- • Unwilling to commit to governance
- • Primarily seeking tax benefits
- • Insufficient premium volume
What you'll need for a consultation
Have this information ready for a captive feasibility analysis.
Business Profile
- •Annual commercial insurance premiums (WC, GL, property, etc.)
- •Current insurance programs and carriers
- •Number of entities/locations and states of operation
- •Years in business and ownership structure
- •Industry, operations, and revenue
Risk & Claims History
- •Five or more years of loss history
- •Loss frequency and severity
- •Current loss ratios
- •Risk management programs
- •Safety and loss control measures
Financial Information
- •Annual revenue
- •Financial statements
- •Risk tolerance and capital capacity
- •Reinsurance needs
- •Lines and limits you need
Captive Structure
- •Desired captive domicile(s)
- •Feasibility study scope
- •Lines to include
- •Target limits and retentions
- •Fronting & reinsurance structure
- •Governance and TPA preferences
- •Long-term goals
Ready to evaluate a captive?
Talk with our team about feasibility, structure and domicile options.
Captive structures
The common ways a captive is owned and organized.
Single-parent captive
Owned by one company or group, and writes that owner’s own risks.
Group captive
Multiple member-owners pool their risks and share governance and capital.
Protected cell company (PCC)
Segregated portfolio structure: multiple participants share a captive "core," with each participant's assets and liabilities held in its own legally separated "cell."
Association captive
Owned by members of a trade association or industry group.
Rent-a-captive
Uses an existing captive structure instead of forming a new one, with less control than owning the captive outright.
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Availability, limits, and eligibility vary by carrier, domicile, and state. Examples are educational and not a guarantee of coverage. Review your issued policy for terms, conditions, and exclusions.
Frequently asked questions
Common questions about captive insurance
Still have questions?
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