SUBMIT A RISK
For a multi-state staffing company, workers' compensation was the single largest line on its insurance program, with substantial premium flowing into the traditional market each year. Yet the underlying loss picture told a very different story: more than 200 reported claims across a five-year period, with not a single loss reaching $100,000 in incurred value. The exposure was frequent but predictable, well-controlled, and consistently profitable for whichever carrier held the paper. Captives Insure structured a program to return that profit potential to the business itself.
Rather than continue transferring both the risk and the reward to an outside insurer, Captives Insure designed a workers' compensation captive that cedes 100% of the risk back to a captive insurance company owned by the insured.. Coverage is issued on A+ (Superior) AM Best rated admitted paper — satisfying the statutory requirements a captive cannot meet directly — and the net premium then reinsures back to the client. The result: $1,363,500 now flows to the client's own captive as a loss fund, available to pay claims and, in favorable years, to be retained as underwriting profit.
- Workers' Compensation, admitted paper. Statutory occurrence limits on A+ (Superior) AM Best rated admitted fronting paper, with a $0 deductible per occurrence to the insured.
- Defined captive retention. The captive retains $500,000 per occurrence, with a $500,000 excess-of-$500,000 reinsurance layer protecting it above that point.
- One turnkey structure. Fronting, reinsurance, trust administration, and claims coordination are implemented seemlessly via Captives.Insure and fronting partner.
| Program Element | Amount |
|---|---|
| Net Premium Retained by the Captive | $1,363,500 |
| Captive Risk Retention per Occurrence | $500,000 |
The net premium retained by the captive is available for losses and retained underwriting profit rather than being surrendered entirely to a third-party carrier. The captive retains $500,000 of risk per occurrence, with a reinsurance layer protecting it above that point.
A Predictable Loss Profile
High-frequency, low-severity workers' compensation exposure — many small claims, no large losses — is among the strongest fits for a captive, because outcomes are stable and the retained loss fund is unlikely to be overwhelmed by a single event.
Rated, Compliant Paper
Coverage is written on A+ (Superior) AM Best rated admitted paper, meeting the statutory financial-strength requirements workers' compensation demands, while the risk reinsures back to the client-owned captive.
Direct Claims Influence
As reinsurer of its own policies, the insured gains independent defense counsel and a direct hand in claims adjudication through the program's third-party administrator — accelerating handling and controlling the ultimate cost of loss.
Profit Retention
Favorable loss years no longer benefit an outside carrier. Underwriting profit and investment income on surplus accrue to the captive's shareholders, with distributions made at the owner's discretion under the program's terms.
By moving from a fully transferred workers' compensation spend to a captive structure, the organization now recaptures nearly $1.4 million as a captive loss fund it owns and controls — while retaining $500,000 of risk per occurrence, with reinsurance above that point. A predictable, well-managed exposure becomes a retained asset rather than a sunk cost.
Is Your Business the Right Fit for a Captive?
If your organization carries predictable exposure, favorable loss history, and meaningful annual premium, a captive may convert that spend into retained profit. Captives Insure designs, fronts, and reinsures programs that put underwriting profit back where it belongs — with you.