Group Captive Characteristics & Success Factors

One of the pioneers of the captive insurance movement discusses the characteristics of group and association captive insurance and describes some of the key factors of success for association and group captives. Hugh Rosenbaum discusses how the degree of control by outside parties, such as captive managers or insurance brokers, and the size of the captive affect the characteristics of these captive insurers. The key success factors for association and group captives are a sense of urgency among the group to solve its risk finance problems, ownership or control of the captive by the insureds, a long-term commitment with minimal attrition by the insureds, appropriate exit provisions, an understanding of the upsides and downsides of risk sharing and loss sharing, and careful underwriting.