Article

Dissatisfaction with standard market claims handling is one of the most common reasons companies form captives in the first place—and one of the clearest benefits once they do. Anyone who's watched a claim disappear into a carrier's claims operation knows the frustration. The file gets assigned to an adjuster you've never met, defense counsel shows up knowing nothing about your business, and the next six months involve repeated explanations of how your contracts work, who the key players are, and why certain relationships matter. It's inefficient for everyone—and in a captive structure, there's a better way.

Getting Counsel Approved

When a captive reinsures a fronted program, the insured has an opportunity to propose defense counsel who already know the business. These aren't rogue appointments—counsel still needs carrier approval. But instead of defaulting to whoever's next in the carrier's rotation, you're bringing forward firms that understand your operations, your contract structures, and your industry from day one.

The result is a claims process that moves faster because nobody's starting from scratch.

The approval process is usually straightforward. Carriers want to confirm a few things: the firm is licensed where it needs to be, has relevant experience for the exposures involved, demonstrates competence, and will work within the carrier's fee schedule. That's it. For qualified firms, this is administrative—carriers benefit from good counsel regardless of who suggested them.

The captive structure simply gives the insured a seat at the table when identifying candidates, rather than accepting whoever the carrier assigns.

What Changes in Practice

Think about how a typical claim unfolds with carrier-assigned counsel. First call is background: "Tell me about your company, your contracts, your operations." Documents get requested that the insured's team has provided a dozen times to different firms. Defense strategy develops without much context about what actually matters to the business.

Now consider counsel who's handled your claims for three years. They know your standard contract terms. They know which customer relationships are critical. They understand your operations well enough to spot relevant facts without a tutorial. Early case assessment is faster and more accurate. Status calls focus on substance, not education.

That efficiency isn't just good for the insured—it helps the carrier too. Better-informed defense means better reserving, faster resolution, and less wasted motion.

Alignment Without Overreach

None of this changes who's in charge. The carrier still controls coverage decisions and settlement authority—that's baked into the fronting arrangement. What changes is the quality of information flowing into those decisions. Defense counsel who actually understand the insured's business produce better case assessments, identify issues earlier, and develop strategy that reflects operational reality.

Everyone benefits when the people handling the claim understand the business behind it. The carrier gets better information. The captive reinsurer has visibility into how claims affecting its layer are being handled. The insured stops re-explaining the same background on every new matter.

Building the Right Panel

Putting together a panel starts with understanding where claims actually happen and what drives them. Which jurisdictions see the most activity? What causes of loss create severity? Where does contract complexity or counterparty behavior create exposure?

A contractor with national operations needs construction defect and indemnity expertise. A healthcare organization needs counsel who understand medical malpractice litigation and regulatory dynamics. Match the panel to the actual risk profile, not a generic coverage category.

Firms that fit these criteria and meet the carrier's baseline requirements—licensing, experience, fee schedule—typically get approved without drama. The vetting process isn't adversarial; it's confirming that everyone's working with qualified professionals.

The Longer Game

Over time, consistent relationships with defense counsel generate something valuable beyond efficiency: data. Matter-level information on venues, plaintiff counsel, disposition patterns, defense spend, and outcomes accumulates in a way that doesn't happen when every claim goes to a different firm.

That data feeds back into underwriting, contract negotiation, and operations. You start seeing patterns—which counterparties generate claims, which contract terms create problems, where operational practices need attention. The captive stops being just a funding mechanism and becomes an intelligence platform for the business.