Article

A large specialty construction company, partnered with C.I. to secure $5 million in excess liability coverage above a $15 million primary layer. The client retains over $2.5 million in gross written premium (GWP) within their captive while satisfying lender requirements. With a 0% historical loss ratio in this excess layer, the client now retains underwriting profits that were previously absorbed by commercial insurers.

Key Components

Excess Liability Structure

• Layer: C.I. provided a $5 million excess of $15 million policy
• GWP: +$4.m
• Quota Share: The captive took a quota share position of the risk and retains over $2.5 million GWP
• AM Best Rating: Policies are issued on A-rated paper, ensuring lender confidence in financial stability

Captive Participation

• The captive’s quota share position allows it to retain premiums that would otherwise flow to commercial insurers, the quota share position allows them the option to not take 100% of the risk, while still participating in the underwriting profit 
• With no historical claims in this layer, the captive retains 100% of the underwriting profit (premiums minus losses/expenses). 

Financial Impact

• Loss Ratio: A 0% loss ratio in the excess layer indicates no claims have penetrated this coverage tier, reflecting strong risk management
• Underwriting Profit: Premiums retained in the captive (over $2.5 million) directly reduce the client’s net cost of risk. By contrast, in traditional markets, these premiums would be a sunk cost never to be seen again

C.I. was able to provide a turn-key captive solution for this insured that allowed them to retain significant premiums, control, and underwriting profit within their captive insurance company, all while providing A Rated paper to satisfy all contractual requirements. Reach out to C.I. today and see if your business may be the right fit for a captive arrangement for no up front cost.