Captive Insurance Panel to Highlight Strategy at IRMI CRC

The IRMI Construction Risk Conference (CRC) will be held at the JW Marriott Indianapolis from Sunday, November 16, to Wednesday, November 19.

Among the anticipated sessions will be a captive insurance panel titled "Captives: Transforming Risk into Opportunity," led by Jack Gibson, CEO of the IRMI. Panelists include Anne Marie Towle, CEO of global risk and captive solutions at Hylant; Stuart Stagner, managing director at Innovative Risk Management; and Andy Stoelting, senior director of insurance and risk management at Webcor.

The discussion will focus on how construction organizations can use captive insurance programs to manage volatility, improve cost efficiency, and strengthen overall risk strategy. Topics will include developing a deeper understanding of captives and their benefits, maximizing utilization across coverage lines, and establishing sound governance, strategic goals, and objectives for captive insurance companies.

Understanding and Optimizing Captive Insurance Programs

Ahead of the session, panelists shared insights into the concepts and best practices they plan to highlight.

Mr. Stoelting noted that, rather than treating a captive as an afterthought, companies should invest the time and energy to understand how their captive insurance program operates from accounting, investment, and governance perspectives.

Building on that theme, Ms. Towle emphasized that education, strategic alignment, and expert collaboration are key to understanding and optimizing captive insurance programs. She added that working with experienced industry professionals can further strengthen the structure and performance of a company's captive.

Mr. Stagner said the panel will highlight the importance of leveraging trusted research resources such as IRMI, publications from captive insurance jurisdictions, and guidance from service providers, including attorneys, consultants, and tax advisers.

Maximizing Captive Utilization and Profitability

Panelists will also address strategies for maximizing participation in single-parent, cell, or group captives. Mr. Stoelting will discuss how—depending on loss history and risk appetite—increasing the retentions the captive insures can help improve profitability. He will also recommend conducting feasibility studies on lines of coverage not currently included in the captive to uncover opportunities for greater efficiency and value.

Ms. Towle said, "To maximize the use and benefits of participating in a single-parent, cell, or group captive, companies should focus on strategic integration, operational efficiency, and continuous optimization. They should conduct annual strategic reviews to assess performance and identify new opportunities; use captive management platforms for real-time analytics, reporting, and compliance; look to stay ahead of domicile-specific changes and global regulatory trends; and keep internal stakeholders informed and aligned with captive goals."

Addressing the value of collaboration within group captives, Mr. Stagner said that rather than using the captive solely as an insurance solution, it should also be seen as an opportunity to engage with other similar business owners on broader business issues. He explained that these groups can serve as informal peer networks where members share advice, counsel, and support in areas not directly related to insurance.

Establishing Good Governance and Strategic Goals

Effective governance and forward-looking strategy will be another focal point of the session. "Good governance is a mindset," said Mr. Stoelting. "All essential stakeholders must buy into the concept that a captive with strong controls builds trust with regulators and auditors. Trust translates to greater discretion for innovation.

"Developing good strategic goals and objectives requires substantial input from your captive's service providers. Whiteboarding with management is not enough. Bring your captive manager, investment adviser, and actuary into those discussions."

Ms. Towle advocated taking a structured approach to laying the groundwork for this, noting that it means establishing a robust governance framework, defining strategic goals, setting clear operational objectives, engaging stakeholders effectively, and reviewing and refining these plans regularly.

Mr. Stagner added, "My advice is to always treat the captive as its own entity and not just a vehicle that supports the policyholder. Think of yourself as a shareholder/director, and you require the type of oversight that you would require in a third-party relationship. Many captive owners conflate their dual roles as a policyholder and a shareholder. However, they are indeed different roles where each must be represented independently."

Key Takeaways for Attendees

In previewing the session's takeaways, Mr. Stoelting said there are three key factors to keep in mind. First, as captives mature and business needs evolve, management may consider restructuring the captive to meet those needs. Second, taking greater retentions and adding new lines of coverage makes sense where losses can be controlled and market conditions support it. Lastly, investing time and effort into the relationships central to a captive's operation helps ensure its long-term financial success.

Mr. Stagner added that the session will challenge attendees to think of themselves as reinsurers—particularly when operating within a fronted program—rather than viewing the captive solely as a tool for meeting policyholder needs. He said the discussion will also help participants evaluate the same considerations a third-party reinsurer would, such as return on capital and performance relative to other investment opportunities.

Establishing Strong Governance and Strategic Direction

In addition to the panel's discussion, Hylant offers a comprehensive framework for building effective governance and strategy within captive insurance programs. The firm advises starting with a robust governance foundation—appointing a diverse and experienced board with expertise across finance, risk management, legal, and operations. Clear charters and bylaws should outline roles, responsibilities, and decision-making authority, while compliance oversight and audit controls help maintain transparency and adherence to domicile and regulatory standards.

Once governance is in place, defining strategic goals becomes essential. Organizations should clarify their risk financing objectives—such as whether the captive will address property, casualty, cyber, or employee benefit exposures—while setting measurable targets for cost efficiency, capital management, and growth. Hylant emphasizes aligning capital deployment with risk appetite and exploring innovation through expanded coverage lines, new markets, or initiatives related to environmental, social, and governance.

Operational objectives provide the structure to execute these goals. According to Hylant, captive leaders should establish service-level expectations for claims handling, define disciplined underwriting criteria, and monitor key performance indicators such as loss and expense ratios, return on equity, and premium growth. Leveraging technology for real-time reporting and analytics ensures compliance and transparency.

Hylant also underscores the importance of strong stakeholder engagement. This includes maintaining open communication between parent company leadership and business units; collaborating with captive managers, actuaries, auditors, and counsel; and fostering constructive relationships with regulators and domicile authorities. Ongoing education and training for board members and operational teams help sustain performance and accountability.

Finally, Hylant recommends that captives regularly review and refine their strategy. Annual reviews, scenario planning, and benchmarking against peers help ensure the captive remains responsive to changing business needs and emerging risks. Through this structured and iterative approach, organizations can establish governance practices that support both operational discipline and long-term success.