Group Captives | Strategic Risk Solutions

One of the primary advantages of a group captive is the opportunity for cost savings.

By pooling risks, members can achieve economies of scale, potentially leading to lower insurance costs when compared to traditional insurance markets. And because the members are also the owners, they maintain significant control over the captives operations, including:

Underwriting standards
Claims handling
Investment policies

This level of control leads to more tailored insurance solutions that better suit each member's specific needs.

Another benefit is the potential for improved risk management. In a group captive setting, members are incentivized to manage their risks proactively, as this can directly impact the captive's overall performance and, consequently, the overall cost of insurance. This mutual interest often encourages a stronger focus on loss prevention and safety programs.

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Benefits & Outlook for 2025

In a group captive, each member company contributes capital to fund the captive and likewise shares in its returns. The structure of a group captive can vary depending on member needs, but the captive itself operates similarly to a traditional insurance company, providing policies, handling claims, and managing reserves.

Crucially, group captives can return underwriting profits and investment income to their members, as opposed to conventional insurance (in which profits are typically retained by a commercial insurer). This can provide an added financial incentive for companies to join––and actively participate in––a group captive. Through collective risk sharing, improved risk management, and their potential for financial returns, group captives offer a compelling alternative to traditional insurance solutions.

Still, it’s important to note that while group captives offer many advantages, they also require intensive commitment and active involvement from each member. The success of a group captive ultimately depends on the collective risk management efforts of its participants as well as their willingness to collaborate and share risk.

Group Captive FAQs

What exactly is a "group captive?"

A “group captive” is a unique arrangement in which multiple organizations come together to form an insurance company. Unlike traditional commercial insurance, in which companies pay premiums to external insurers, group captives allow participating organizations to retain certain risks at lower costs while still transferring other risks (often amounting to catastrophic losses) to an insurer.

Why would companies form a group captive?

Multiple organizations may form a group captive to help control the costs of insurance, claims management, and/or program design. A group captive can also reduce long-term risk through stabilized annual costs; improve safety and quality by sharing best practices on insurance- and risk-management-related issues within a centralized administration; and build an efficient and profitable venture that offers market-competitive insurance rates.

What are the challenges that come with forming a group captive?

Issues such as upfront capital, finding a front company for a long-term partnership, or reluctance toward transparency regarding operations and loss results can all pose challenges when establishing a group captive.

What makes a group captive successful?

A strong, robust loss control program is key to a group captive’s long-term success. A viable safety environment can reduce employee and customer fatalities, injuries, and/or illnesses. This results in cost savings in a variety of areas, including losses and OSHA penalties , while also improving members’ overall productivity and financial health.

SRS Group Captive Stats

126 Group Captives

Agriculture	6	Construction	13
Education	3	Financial Services	10
Healthcare	24	Heterogeneous	34
Other	12	Professional Services	2
Real Estate	4	Retail	2
Services	2	Transportation	14

7 Active Domiciles

Barbados	Montana
Bermuda	Tennessee
Cayman Islands	Vermont
Hawaii

About Strategic Risk Solutions

SRS is the world’s largest independent insurance company manager. With over 25 years of experience, SRS provides management and consulting services to a wide range of insurance company structures, from single-parent captives to complex commercial insurers and reinsurers. SRS has operations in North America, South America, Europe, Barbados, Bermuda, Canada, Cayman Islands, and South Africa.

Establish a trusted partnership with SRS.

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