Group Captive Insurance: Stop Renting. Start Owning.
Member-owned group captives let safe energy companies take control of their risk management costs — and earn dividends on the claims they never file.
The Traditional Market Doesn't Favor Safe Energy Companies.
Commercial P&C premiums have risen for 31 consecutive quarters. Even if your operation has zero claims, your rates go up.
You are subsidizing the losses of unsafe companies, and carriers profit from both sides of the equation. It's time to rethink your CORE risk strategy.
The Cheat Code to Commercial Insurance.
A member-owned group captive is an insurance company formed and owned by its members. You pool resources with other best-in-class operators, share a defined layer of risk, and collectively benefit from the group's safety performance.
You become a shareholder in a licensed insurance company — not just a policyholder. You have voting rights and an economic stake in the captive's performance.
Roughly 65% goes into a loss fund to pay your own claims. The remaining 35% covers reinsurance, fronting carrier fees, and administration. The loss fund is your money.
At the close of each accident year, unused loss funds are returned to members as dividends — plus the investment income earned while the funds were held. Safe companies win.
Where Your Premium Goes in a Captive.
Percentages are illustrative, though common. Actual allocations are actuarially determined per program.
In a traditional program, 100% of your premium leaves your balance sheet. In a captive, the loss fund stays in your corner — invested, growing, and returned to you if you don't spend it.
Pays your own frequency claims. Unused funds are returned as a dividend at year-end, plus investment income earned while held.
Covers severity claims above your primary retention. Shared among all members. Provides the risk distribution required for legal captive status.
Covers the fronting carrier (Zurich), external reinsurance, claims administration, captive management, and brokerage. Fully transparent.
The Numbers Don't Lie.
An independent actuarial study of 15 mature group captives tracked 233 closed accident years and 1.5 billion work hours. Here is what the data shows.
Dividends Returned to Members
(23% average return on loss funds)
Of Accident Years Produced Dividends
(across 233 closed years)
Fewer Lost-Time Claims vs. BLS
(saving $153M)
Source: Captive Resources, LLC — Independent Actuarial Study of 15 Mature Group Captives. Audited by PricewaterhouseCoopers.
The Honest Answers About Group Captives.
Captives are not for every company. But if you qualify, the objections can be answered.
Your risk is capped. You are only responsible for a primary retention layer — typically $200K–$400K per occurrence. Anything above that is covered by the shared group layer and external A-rated reinsurance. You are not betting the company.
No. Group captives are audited by PricewaterhouseCoopers, use actuarially determined premiums, and pay real claims. The IRS has pursued abusive micro-captives — single-owner structures designed to shelter income. Group captives with hundreds of unrelated members have a completely different legal profile.
There are no handcuff clauses. You can exit at any time. The mechanism is called a Tail Fund — you make a final contribution to cover your open claims, and you are done. Any surplus comes back to you as a final dividend.
In your current program, you rent insurance. Every dollar you don't spend in claims is the carrier's profit. In a captive, you own a share of the insurance company. Every dollar you don't spend comes back to you. The structure is fundamentally different.
Captives Are Exclusive. That's the Point.
A group captive only works if the members are best-in-class. The qualification criteria protect the integrity of the loss pool — and the dividends of every member. If you have a dedicated EHS safety culture, you may qualify.
Strong candidates typically check all of these:
- →$250,000+ in combined Workers' Comp, General Liability, and Commercial Auto premiums ($500,000+ for oilfield transportation)
- →Five-year loss experience better than the industry average for your sector
- →Dedicated safety culture — documented programs, management commitment, low DART rate
- →Financial stability — profitable and able to post a Letter of Credit for collateral
- →Long-term mindset — captives reward patience; the best results come after 3–5 years
Find Out How Much You Left on the Table.
The first step is a Five-Year Lookback. We run your actual loss history through our actuarial model to show you exactly what your premiums and dividends would have been had you been in a captive for the last five years.
No cost. No commitment. Just the math.
The Best Safety Record in Your Industry Deserves More Than a Lower Rate.
It deserves ownership. Let's talk about whether a captive is right for you.
Talk to Peter Brecht Directly.
No pitch. No pressure. Just a straight conversation about whether a captive makes sense for your operation.