From Policyholder to Owner: Key Considerations Before Joining a Group Captive Insurance Program

Group captives have had a remarkable run over the past 20 years. U.S. premium now sits around $6.5 billion, with more than 90 active programs on the casualty side of the market alone. As the model has grown, so has the temptation to treat one captive like any other. This is the mistake worth avoiding. No two captives are the same, and what separates a strong captive from weaker captives usually comes down to one key thing: who its members are.

When you join a group captive you are not simply buying a policy, you are buying into a private insurance company as a shareholder. This mentality changes the questions members ask, and why they matter.

Key Questions About Membership, Risk, and Performance

Flattery’s advice to any business owner weighing a captive is to look hard at the company you would be keeping.

If you have a group captive that is 50 to 100 members, what’s the makeup and mix of those companies? Also, what’s the historical performance of the group? If you’re a business owner, you really want to ask, are we like these companies, or very dissimilar to them?

Those questions carry more weight than those considering the idea of joining a group captive initially realized, because all members of the captive share the same risk pool. The quality of the group becomes yours and everyone else’s risk, and the group’s performance becomes yours and everyone else’s performance.

Why Rigorous Vetting and Member Selection Matter

A group captive is a private insurance company owned by its members. Keep the pool small and the standard for getting in high. If it’s going to be a smaller pool of companies, it better be a cleaner pool of companies in order for it to be profitable, so vetting is of ultimate importance in the captive world.

At ICS, the vetting process runs through four checkpoints before a company is approved:

• An independent third-party actuary reviews the prospective member’s five-year loss history.
• A carrier partner confirms the company’s risk profile fits its appetite and the specific captive.
• A risk advisor takes a deeper look at claims history, safety practices, and company culture over the past decade.
• Existing members review and approve every new company that joins.

The discipline shows up in the results. As of July 1, 2026, ICS captives had an average return of premium of 26%, with more than $1 billion returned to its members since 1999.

It also means saying no, sometimes often. Most of the companies that we talk to, when you look at their history and when you look at their risk profile, they’re not a good fit for a captive, so in order to maintain the strong performance, we’ve got to make sure we maintain high standards on the quality of companies that are coming into our groups.

Group Captive Ownership Benefits: Greater Control, Transparency, and Member Engagement

Intense selectivity produces something a standard policy never will. Flattery calls them best-in-class peer groups, where members trade their ideas and hard-won lessons that lift the whole group’s performance.

Members are literally shareholders buying into an insurance company With that ownership comes greater involvement, including a voice in key decisions, visibility into performance and opportunities to share best practices with other members. You are not handing your risk to a carrier and waiting for a renewal letter, you have a seat at the table.

Finding the Right Long-Term Fit Through Performance, Trust, and Risk Alignment

The right match comes down to risk profile, historical performance, and culture. Brokers are central to finding it, and trust is what confirms it. Brokers who know ICS well bring forward companies that genuinely belong. New members who have been through the same vetting process as the older ones and developed the same trust that new members were also held to among the same standards.

We want to have great and deep relationships with our broker partners, so when they call us with a client that may be a good fit for a captive, we trust their judgment.

His key advice is to judge a captive the way a business owner would, not the way a consumer would. Look at performance in five-to-ten-year increments rather than a one-year premium comparison. Over that horizon, the quality of the vetting becomes visible in the returns, and that is what protects the value of the captive year after year.

Tim Flattery’s full conversation on group captive vetting appeared in PropertyCasualty360. You can find Tim’s full article here. Wondering whether your business, or your client’s, is the right fit for a group captive? Contact our team of captive experts today!