“THE USE OF GROUP CAPTIVES WILL CHANGE THE WAY THE INSURANCE
INDUSTRY DOES BUSINESS AND CHANGE THE FACE OF RISK TRANSFER.”
26 cayman captive 2019
which comprise members from many different industries. When an
existing captive comprises hundreds of members, a new captive may
be formed as a means of managing growth.
“The captive still wants to grow, but logistically it becomes more
difficult and begins to impose limits. It’s really more a logistical
situation—a case of being able to effectively service members and
conduct offshore board meetings. It’s a phenomenon not experienced
by other types of captives,” he says.
“When a captive gets to around 250 members, we recommend
raising its minimum premium level and starting a second captive with
the same broker network. In doing so, companies of similar size are
grouped together, creating opportunities for smaller companies in
the new captive. We have already helped five large captives through
The second area of growth is through the creation of new
homogeneous captives, grouping together companies from within
the same industry that have similar risks. He says the company has
formed group captives covering sectors including temp staffing, oil
drilling, and heavy construction in recent years.
“These work well for sectors that are perceived as higher risk,
but that nonetheless have great companies operating in them,”
Finally, Captive Resources expects to form a second benefits captive
in 2019, which will act as a stop loss programme for its members. He
says this is being done based on market demand.
A bright future
Hentges says he is excited about the future and working in the new
structure. He says the company has an abundance of talent and he
has spent a lot of time with the other senior leaders ensuring their
roles will complement each other going forward.
He adds that an important thing is maintaining the culture of the
company and looking after its people.
“With the growth we have had, the important thing is keeping the
culture intact and remaining a company that people want to work for
and clients love doing business with. A big part of that is taking care
of our employees, who will in turn, take care of our clients,” he says.
“If we achieve that, everything else will fall into place. Maintaining our
culture and continuing to provide exceptional service to our clients will
allow us to achieve longevity, not just for the next 20 years but the next
50 to 100 years—that is very important to us.”
Nick Hentges is president and soon-to-be co-chief executive
officer of Captive Resources. He can be contacted at:
the insurance industry does business and change the face of risk
transfer,” he says. “Based on the growth we are seeing, it is clear
that people increasingly feel that this is a better way of managing risk
versus traditional options.
“It is a question of educating the companies themselves and the
brokers they work with, but that has always been part of our mission
and we are making real progress in that regard.
“We want companies to better understand that this allows them
to share risk with like-minded companies, improves their risk
management practices and saves them money in the process.”
Investing in the future
Hentges adds that the technology and systems used by Captive
Resources are also improving, making processes more efficient and
the available information far more comprehensive and user-friendly.
He explains that the company is investing heavily in improving its
own technology; has rolled out a new business development team
dedicated solely to educating brokers on the benefits of group
captives; and has hired at a brisk pace, driven in part by the robust
growth, but also by a focus on rounding out its talent base and
positioning for the future.
“We have a number of different projects under way, several of which
revolve around information technology,” he says. “We are improving
some of our existing systems and practices to ensure clients get a
better and more efficient experience as well.”
He adds that this new phase is a very dynamic and exciting one,
especially in the context of the company’s long history.
“We are very excited about where we are going and that is especially
true when you consider how we have helped evolve this market and
move it forward over the past three decades.
“Twenty-five years ago, the group captive insurance sector generated
about $100 million in premium. Now, the largest individual member we
work with is paying premiums of more than $30 million.
“The captives have changed and the size of company we can help
has changed dramatically. Several group captives we work with have
matured and grown to a size that easily accommodates members
paying millions in premium,” he explains.
“A captive with 400 member companies and $350 million premium
is a sizeable company in its own right, and is able to accommodate
some very large member companies.”
Hentges believes growth for Captive Resources will come from three
The first will be the creation of more heterogeneous group captives,