Author Archives: jeremy

Group Captive vs. Single Parent Captive:
When Is It Time to Leave the Harbor?

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By Nichole McCabe

Group Captive vs. Single Parent Captive: Is It Time to Leave the Harbor?

One of the questions I get asked often is: “How do I know whether a group captive or a single parent captive is right for my company?” Or, for companies already participating in a group: “How do I know when it’s time to consider forming our own?”

I think about it like boats in the ocean.

Imagine your business is a small boat operating in the traditional insurance market. You can operate your business safely and manage your own risk well for years, but you don’t control the weather. Catastrophe losses, social inflation, nuclear verdicts, carrier capacity, reinsurance pricing, and poor loss experience elsewhere in the market can eventually reach you, regardless of how well your own company performs. This is where we often see the best-in-class companies funding, at least in part, the performance of the worst-in-class.

A group captive moves that boat into a harbor. The weather hasn’t disappeared and the water can still get choppy, but now there are protections around you. Instead of being broadly pooled with the traditional market, you’re sharing risk with companies selected based on underwriting standards, loss performance, safety practices, and risk management.

For many businesses, that harbor may be exactly where they belong long term. A smaller company with relatively stable premium volume may never have the scale, capital, or economics to justify its own captive. That doesn’t make the group captive a stepping stone it failed to graduate from. It may simply be the right structure.

But some companies eventually outgrow the harbor.

A company may enter a group captive with $250,000 in casualty premium and, several years later, find itself approaching $1 million or more. Meanwhile, losses are improving, safety culture is stronger, management understands its risk better, and the company has greater financial capacity and appetite to retain that risk. Eventually, management may start asking: “Why are we still sharing this much risk with everyone else?”

There is no magic premium threshold or number of years that means it’s time to leave the harbor. In fact, leaving may not be the right answer at all. A company may continue using a group captive for certain lines while exploring a single parent captive for other risks where greater control, customization, or risk retention makes sense. But when scale, loss performance, risk management, financial capacity, and risk appetite have materially changed, it may be time to evaluate whether the company’s overall risk-financing strategy should evolve too.

And importantly, you don’t leave the harbor because the harbor failed. Sometimes the group captive did exactly what it was supposed to do. It helped the company develop a different relationship with risk and mature into an organization capable of taking greater control.

The goal isn’t necessarily simply to own a captive. It’s to finance risk through the structure, or combination of structures, that makes the most sense for the company you’ve become.

And sometimes the structure that got you here isn’t necessarily the structure that takes you where you’re going next.

What’s Happening Behind the Curtain? The Other Side of Insurance M&A

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$17 billion. That’s a lot happening behind the curtain.

When I was a kid, my dad used to take my sister and me to Chuck E. Cheese. While everyone else was watching the animatronic band, I remember wondering what the heck was happening behind that curtain.

Apparently, I’ve been interested in operational infrastructure since I was eight.  Because decades later, I find myself asking the exact same question about mergers and acquisitions: What’s happening behind the curtain?

Aon’s announced $17 billion acquisition of USI is the latest chapter in what has become a remarkable period of consolidation across the insurance industry. We see the announcement, the purchase price, the strategy, the synergies and the opportunity. What we don’t see is the enormous operational undertaking required to make two organizations actually function as one.

Consolidation itself isn’t inherently good or bad. Scale can create tremendous resources, market access, technology and expertise. But integration is hard.

According to PwC’s M&A Integration Survey, just 14% of respondents reported significant integration success across strategic, financial and operational measures. PwC also found that successful integrations retained key employees at more than twice the level of less successful integrations, while systems and process integration remains among the most difficult areas to execute. And that matters because integration happens while everyone still has a day job.

Employees may be navigating systems that don’t quite talk to each other yet. Client data still has to remain accurate and cohesive. Operating models, reporting structures and processes are changing, while talented people continue managing existing accounts and relationships, sometimes with more on their desks than they can successfully manage.

McKinsey’s research reinforces the human side of that challenge. Across ten years of M&A survey data, organizational issues such as cultural differences and changes to operating models accounted, on average, for almost 50% of mergers failing to meet expectations. McKinsey notes that poorly managed organizational change can contribute to poor business performance, loss of critical talent and leakage of expected synergies. Talent deserves particular attention. During a transaction, some of the people most important to maintaining client relationships and institutional knowledge can also become vulnerable to outside opportunities. That means employee retention isn’t simply an HR issue. It can become an operational issue, a relationship issue and ultimately a client issue.

When integration doesn’t keep pace with acquisition, that burden can eventually reach the client experience too. Teams can become stretched thinner, response times can change, relationships can move and processes can become more complicated. As organizations become larger and more complex, I believe maintaining true solution neutrality becomes increasingly important. The better questions is, “What is the best solution for this client?” Not: “What is the best solution available within our platform?”

Anyone who knows me knows how I feel about one-size-fits-all risk solutions. That’s one of the reasons I’m so excited about what we’re building at Capterra Risk Solutions. We grow when our clients need us to. We listen because we can. We don’t begin with a product or structure and figure out how to make the client fit inside it. We begin with the business: its risks, objectives, people, appetite and where it wants to go. Sometimes the answer is a captive. Sometimes it isn’t. Sometimes it’s a structure we’ve used many times before, and sometimes the client requires something entirely different.

The insurance industry will continue to consolidate, and there are compelling reasons for it to do so. But as organizations get bigger, I believe something else becomes increasingly valuable: the ability to remain close enough to the client to hear what they’re actually saying.

Scale is powerful. So is attention. And clients shouldn’t have to wonder what’s happening behind the curtain.

Sources:

PWC Successful Mergers

McKninsey Cultural Change in Mergers

McKinsey Integrate Talent

 

 

Capterra Announces Nichole McCabe as Managing Director

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Nichole McCabe is Managing Director of Capterra Risk Solutions. She brings more than a decade of experience designing, evaluating, and implementing captive insurance and alternative risk financing strategies. She advises privately held businesses, public companies, executive leadership teams, boards of directors, and private equity firms seeking customized approaches to managing and financing risk.

Her experience spans a broad range of industries, including commercial real estate, renewable energy, and diversified commercial enterprises. She has worked with organizations ranging from family-owned businesses to Fortune 100 companies, guiding them through captive feasibility, formation, implementation, governance, and long-term stewardship.

Nichole’s expertise includes single-parent and group captives, protected cell companies, medical stop-loss captives, and sophisticated property and casualty programs. She has advised clients using both domestic and offshore domiciles, including Bermuda and the Cayman Islands, providing a broad perspective on program structure, domicile selection, regulatory requirements, governance, and long-term strategy.

At Capterra Risk Solutions, Nichole combines her independent advisory perspective with the firm’s captive management and alternative risk expertise. This collaborative approach allows her to support increasingly complex programs while continuing to provide the creativity, flexibility, and objective guidance their clients value.

Nichole is also passionate about helping business owners, CFOs, brokers, risk managers, and professional advisors better understand the strategic potential of alternative risk financing. A frequent industry speaker, she believes the greatest value of a captive lies in creating a sustainable solution built around the client—not offering a standardized product.

Originally from coastal San Diego, Nichole now lives in Central Oregon with her two daughters. Outside the office, she enjoys horses, barrel racing, rodeo, youth sports, hiking, camping, paddleboarding, fishing, and caring for the family’s small farm.

As a member of the Capterra Risk Solutions team, Nichole looks forward to helping organizations rethink how they finance risk and build captive programs that support their long-term business objectives.

“Insurance transfers risk. Captives transform it into opportunity,” said McCabe. “My role is helping clients understand the difference.”

Maxim-Fenters Returns to Captive Review Power 50

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The Power 50 is an annual list from Captive Review of the 50 most influential captive insurance professionals from the last year. Sandra Mzxim-Fenters returns to the Captive Review Power 50 for 2026.

Captive Review summarized Sandra’s nomination in the following:

  1. Sandra Maxim-Fenters, CEO & President, Capterra Risk Solutions

Back in the Power 50 is Maxim-Fenters. As the business founded 16 years ago, Capterra Risk Solutions continues to grow and prosper under her leadership. The firm specialises in creating alternative risk transfer mechanisms and captive insurance companies. Today, it has captive clients located all over the world.

 

Sandra began her career as an underwriter at Chubb and subsequently spent time in broking. Her experience spans multiple disciplines including surety, professional liability, commercial liability and high net worth personal lines insurance. In addition, Maxim-Fenters has authored numerous articles on captive insurance and was faculty for University of Delaware’s captive programme. She is an active member of the Self-Insurance Institute of America and sat on committees specific to captives and advocacy.

Congratulations to Sandra and her fellow nominees.

5 Mistakes Business Leaders Make When Starting a Captive (and How to Avoid Them)

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By Bill Eleamos, MBA, ACI

Captive insurance can be a powerful tool for business owners and CFOs seeking to secure coverage, control losses, and build financial strength. When structured correctly, a captive allows a company to protect assets, improve claims control, and retain underwriting profit in ways the commercial market often can’t. But the early stages matter, and common mistakes can undermine performance before the captive ever gets off the ground.

We point to 5 common mistakes, examples of missteps we’ve observed, and insights on how to avoid these pitfalls.

  1. Skipping Feasibility and Actuarial Modeling
    Captives that launch on instinct rather than analysis often struggle with pricing and capitalization. Feasibility studies and actuarial projections ensure the captive is funded appropriately and designed to withstand multi-year variability.

Case: A construction company formed a captive based on an internal premium evaluation rather than actuarial projections. Within two years, unexpected claim severity required additional capital contributions, straining cash flow and undermining confidence in the structure.

Capterra Key Takeaway: Proper modeling prevents surprises

  1. Treating a Captive as a Tax Strategy Instead of a Risk Strategy
    Some firms view captives through a tax lens first—leading to misaligned coverage and increased regulatory scrutiny. A successful captive begins with risk: analyzing exposures, historical losses, and coverage gaps. Tax benefits, if any, become secondary to sound underwriting.

Case: A professional services firm insured low-frequency, low-severity risks simply to maximize premium deductions, while leaving its largest exposures—cyber liability and E&O—unaddressed. During an audit, the structure was challenged due to a lack of genuine risk transfer.

Capterra Key Takeaway: Start with real risk, not tax

  1. Selecting the Wrong Domicile
    Not all domiciles (domestic or offshore) are equal in terms of regulation, speed, reporting, and cost. Choosing based solely on convenience or tax considerations can create friction later. Evaluating regulatory culture, capital standards, and operational support prevents future headaches.

Case: A manufacturing group selected an offshore domicile based solely on perceived lower cost of entry and regulatory oversight. They later encountered delays in regulatory approvals, limited access to local service providers, and difficulty coordinating with U.S.-based service providers—leading to higher long-term costs and operational friction.

Capterra Key Takeaway: Evaluate regulation, support, and long-term fit

  1. Underestimating Compliance and Governance
    Captives are regulated insurance companies, and they require ongoing governance, documentation, and board oversight. Firms that underestimate this element risk compliance gaps. Expert captive managers help build a solid governance framework from the start.

Case: A captive’s board and service providers failed to hold regular board meetings or maintain adequate documentation. During a regulatory review, gaps in governance led to increased scrutiny and required remediation efforts, including retroactive documentation and policy adjustments. 

Capterra Key Takeaway: Captives require real governance discipline

  1. Failing to Integrate the Captive into Enterprise Risk Strategy
    Captives shouldn’t operate in isolation. When aligned with enterprise risk management, claims data, and loss-control programs, they become strategic assets—strengthening resilience and improving decision-making.

Case: A logistics company operated its captive in isolation from its safety and risk teams. As a result, valuable claims data wasn’t used to improve driver safety programs, and loss ratios remained elevated. Once integrated, they reduced claims frequency by over 20% within two years.

Capterra Key Takeaway: Integration unlocks value—transforming your captive from a financing tool into a strategic asset that drives loss reduction, operational insight, and improved profitability.

The Bottom Line
Captives aren’t just financial tools—they’re long-term risk strategies. Done right, they create control, stability, and profit. Firms like Capterra Risk provide the risk management, underwriting, and operational expertise to help organizations build captives that perform from day one.

Influential Women Spotlights Sandra Maxim-Fenters

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Industry Leader in Captive Insurance and Alternative Risk Management Driving Innovation, Culture, and Strategic Growth

Pittsburgh, Pennsylvania — Sandra  Maxim-Fenters is the CEO and President of Capterra Risk Solutions, a leading firm in captive insurance  and alternative risk management, and the Founder and CEO of MaximRe, a prominent reinsurance company. Over the past 15 years, she has cultivated a reputation for blending technical expertise with forward-thinking strategies, while fostering a corporate culture that empowers teams to perform at their highest level.

Sandra’s leadership philosophy centers on being the “keeper of the culture,” ensuring that both employees and clients thrive in collaborative, creative, and high-performing environments. Her approach reflects a deep commitment to people, purpose, and strategic vision, which has been a guiding force in her professional journey.

As a single mother of three, Sandra has demonstrated extraordinary resilience, successfully supporting her children through college while simultaneously growing her businesses. Under her guidance, Capterra Risk Solutions has helped over 100 companies establish their own insurance entities and expanded across multiple states, including Pennsylvania, North Carolina, and most recently California, where her daughter now leads the newest office.

Sandra holds a Property and Casualty License and earned her BA in English and Political Science from Allegheny College. She is a graduate of University of Pittsburgh Institute for Entrepreneurial Excellence at The Joseph M. Katz Graduate School of Business. Sandra has been recognized as one of Captive International’s Influential Women in Captive Insurance and named to Captive Review’s Power 50.

Sandra attributes her success to a combination of clear vision, resilience, and an unwavering dedication to people and purpose. She began her journey into alternative risk and captive insurance with a bold step that has grown into a 15-year legacy defined by trusted client relationships, technical and creative excellence, and a commitment to paying forward the support that shaped her own career. Her work is a reflection of combining rigorous technical knowledge with innovative strategies and a culture-driven approach to leadership.

The most influential career advice Sandra received was to lead with both vision and discipline. Early in her career, a mentor explained that technical expertise could get her in the room, but culture, strategy, trust, and persistence were what would keep her there. This guidance has informed her approach to building Capterra Risk Solutions and continues to shape how she leads her team today. By pairing technical mastery with innovative thinking, Sandra has grown her business while maintaining regulatory compliance, client trust, and a company culture that values both relationships and results. A notable example of her innovative approach is the creation of MaximRe, a reinsurance captive company designed to support Capterra clients and the broader insurance industry.

For young women entering the captive insurance and alternative risk space, Sandra emphasizes the importance of owning their seat at the table. She encourages mastering technical knowledge, asking insightful questions, and becoming fluent in the fundamentals of insurance and finance. She also stresses cultivating strong networks and mentorships while creating opportunities for others to advance. According to Sandra, leadership does not require sacrificing authenticity; professionals can be strategic and empathetic, analytical and creative, while maintaining resilience, curiosity, and a strong commitment to people.

Sandra identifies education as both a challenge and opportunity in the field. Captive insurance is often perceived as complex, yet it provides organizations with powerful tools to control risk, reduce volatility, and align insurance with operational realities. Firms that demystify this space and clearly communicate its value are positioned to lead the next wave of growth. Client expectations have shifted as well—technical competence is necessary, but clients increasingly value partners who understand their business holistically. Sandra sees these changes as opportunities for innovative, client-centered leadership in the alternative risk industry.

At the core of her work and life, Sandra values purpose, integrity, resilience, and commitment to people. As CEO, she prioritizes being the keeper of the culture, ensuring accountability is balanced with humanity, and that clients, colleagues, and team members are supported and empowered. Integrity remains non-negotiable in her highly regulated industry, while resilience, honed by raising three children while building a company, serves as a guiding principle. Above all, Sandra prioritizes family, mentorship, and the opportunity to pay forward the support she has received throughout her career.

Looking ahead, Sandra L. Maxim-Fenters continues to grow Capterra Risk Solutions with a focus on innovation, excellence, and people-first leadership. She remains dedicated to mentoring emerging professionals, advancing the industry, and creating opportunities that empower her team and clients to reach their fullest potential.

Learn More about Sandra L. Maxim-Fenters:

Through her Influential Women profile, https://influentialwomen.com/connect/sandra-maxim-fenters or through her profile on Capterra Risk Solutions, https://capterrarisk.com/about-us/capterra-risk-solutions-team-members/sandra-fenters/

Influential Women

Influential Women provides a platform where women from all backgrounds can connect, share their perspectives, and create content that empowers themselves and others. Through storytelling, thought leadership, and creative expression, Influential Women amplifies voices that inspire change.

About Capterra Risk Solutions

 

Founded in 2010, Capterra Risk Solutions is an alternative risk insurance consultant and licensed captive manager in both onshore and offshore captive jurisdictions.

Capterra offers an unparalleled level of risk management and underwriting expertise to firms desiring to expand insurance coverage, control losses, harness profits, and preserve assets through captive insurance planning and other alternative risk solutions.

 

More information is available on www.capterrarisk.com

 

Celebrating 15 Years of Capterra Risk Solutions: A Reflection and Thank You from Sandra L. Maxim-Fenters

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What a milestone! As Capterra Risk Solutions celebrates its 15th anniversary, my heart is full of pride and gratitude. I’m reflecting on the people, partnerships, and purpose that have shaped our journey. What began in 2010 has grown into an independent leader in captive consulting and insurance management, which is committed to unmatched expertise, integrity, and client-centered service. Fifteen years later, that commitment remains our foundation.

Our mission has always been clear: to help organizations expand insurance coverage, control losses, harness profits, and protect the assets they’ve worked so hard to build. Through feasibility studies, business plan development, underwriting, corporate governance, reinsurance, and the consulting and management of U.S. and international captives, we strive to bring clarity and confidence to an increasingly complex risk environment. This work is possible only because of the trust our clients and partners place in us. Your confidence fuels our resolve every day.

Our Vision
When I founded Capterra, my vision was simple: to create an organization where the fundamentals of insurance met forward-thinking risk strategies, creative problem-solving, and a culture that supported people in doing exceptional work. That aspiration became the foundation for the environment we have today—one built on ingenuity, collaboration, and a shared commitment to our mission.

We built our brand to reflect our mission.

• Our name: “Cap” nods to the captive industry, while “terra”—Italian for “earth”—speaks to our national and international reach.
• Our logo: A stylized globe reinforces that global perspective and brings the “terra” concept to life in our visual identity.

It Was Not Always Easy
Pursuing that vision came with its challenges. Professionally, I felt prepared—with the knowledge, determination, and entrepreneurial spirit needed to build something new. Personally, the path was less clear. As a single mother of three, balancing a demanding new venture with the responsibilities of family life was daunting. Many moments required deep reflection about how to move forward in a way that honored both my career aspirations and my children’s well-being.

Along the way, I heard countless reasons why starting Capterra might not be possible—concerns about risk, about timing, and about the barriers women often face in the insurance industry. However, what guided me wasn’t a sense of boldness or self-assurance; it was a genuine belief in the value this work could bring to clients and in the potential of the alternative risk space. That purpose kept me moving, step by step, even when the path felt uncertain.

Support from Family, Colleagues and Our Team
What I know for certain is this: no one succeeds alone. Building Capterra has always been a team journey. I relied on the unwavering support of my family, and I surrounded myself with colleagues, advisors, and industry partners whose insight and encouragement made the impossible feel achievable. My gratitude for them runs deep. Their support through the highs and lows helped shape Capterra into the organization it is today.

I am equally grateful for the people inside Capterra who make this mission real. Our team—professionals with deep experience in underwriting, claims, accounting, and finance—is the reason clients consider us one of their most trusted advisors. Their expertise, discipline, and genuine dedication are the heart of our culture and the key to our success.

I want to offer special appreciation to Bill Eleamos, our Vice President of Finance and now Partner, who has been with Capterra since 2015. Bill’s leadership, financial stewardship, and steady commitment to our clients have been central to our growth. His work embodies the integrity and partnership we value most.

Looking ahead, developing the next generation of captive insurance leaders remains a personal priority. Our industry thrives when we identify, mentor, and elevate emerging talent—people who bring fresh thinking, analytical strength, and a passion for innovation. We will continue investing in young professionals and creating opportunities for them to grow and contribute meaningfully to our field.

Fifteen years is both a milestone and a beginning. To our clients, partners, team members, and friends—thank you for being part of our story. Together, we will continue building the future of captive insurance with expertise, integrity, and unwavering commitment.

Sandra L. Maxim-Fenters
President & Founder
Capterra Risk Solutions

Hard Market Resilience:
How Captive Insurance Provides Stability When Commercial Insurance Rates Soar

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When premiums jump 20% or more seemingly overnight, most businesses scramble to cut coverage or absorb the hit. Companies with captives don’t. They keep control.

The insurance market moves in cycles. Sometimes it’s a “soft market,” with plenty of coverage options and competitive pricing. Other times, as in recent years, it’s a “hard market,” where rates climb steeply and insurers tighten terms and availability. Most businesses feel powerless in this environment. But there’s another path: captive insurance. By creating their own insurance subsidiaries, companies can stabilize costs, fill coverage gaps, and take real control of their risk. Let’s start by detailing hard markets and their impacts.

Statistics Tell the Story of This Latest Hard Market 

In the first quarter of 2023, Commercial Property saw rate increases of over 20% across the board; this represented the first time this line of coverage saw average rate hikes above 20% in over twenty years.  Rates continued to increase at this level throughout the latter half of 2023.  Although rate increases began to moderate in later 2024 and continue into 2025, companies still saw commercial rate increases of 10-20% in the second half of 2024, according to USI Insurance Services’ 2025 Commercial Property & Casualty Market Outlook.

While Property was the non-traditional leader of this latest hard market, Auto Liability was a little later to the game but saw significant rate escalation in 2024 and into 2025.  According to Business Insurance USA, Commercial Auto Insurance premiums have increased by 15-25% in the past year.

“Severe weather events in recent years have hit insurers with record losses,” said Derek Freihaut, Principal and Consulting Actuary, Pinnacle Actuarial Resources, Inc. “As carriers experience higher total losses from hurricanes, wildfires, and floods, they have to raise rates to cover the rising cost of these disasters.”

The cumulative effect of these sustained rate increases creates a hard market “misery index,” if you will, for businesses. The Council of Insurance Agents & Brokers (CIAB) confirms that commercial insurance premiums have increased for 31 consecutive quarters (over 7 Years).

Why Hard Markets Hurt Businesses

Hard markets don’t just sting—they disrupt. Companies are forced to absorb substantial price increases, which negatively impact budgets. Coverage limits also shrink, leaving businesses exposed. In certain industries, carriers may even pull out completely, leaving buyers with no options at any price. For companies without alternatives, the choices are grim: accept restrictive terms, overpay for coverage, or take on risks uninsured.

“The impact of the hard market extends well beyond price increases,” said Griff Gatewood, Senior Vice President, Alera Group. “Many companies have been forced to accept significantly higher deductibles just to keep rate hikes in check and maintain the limits they need. That means they’re taking on more risk themselves while still paying more—so their total cost of managing risk has risen sharply.”

What Captives Really Are

A captive is simply an insurance company that your business owns that insures specific risks of your business. Instead of sending premiums to outside insurers, a parent company funds its captive and pays premiums into it. The captive then writes policies to cover the parent’s risks. For exposures too large to retain alone, captives can buy reinsurance, giving them access to the same global safety nets commercial insurers use. The result: protection that meets your needs but operates on your terms, not the market’s.

Financial Stability That Compounds

Captives do more than save money in the short run—they build financial stability over time. Premiums stay in-house, improving long-term cash flow. Reserves held by the captive generate investment income, which benefits the parent company instead of an outside insurer. Pricing becomes far more predictable, making it easier to budget year after year. Depending on the structure and domicile, there may also be tax benefits, such as deductible premium payments or tax-deferred investment growth. Over time, captives shift insurance from a sunk cost into a strategic financial tool.

Flexibility and Control Over Coverage

Captives give businesses something the commercial market rarely offers: freedom. Policy language can be tailored to cover risks that traditional carriers exclude, from regulatory actions to supply chain disruptions. Claims handling can align with the company’s goals, not an insurer’s profit motives. Limits, deductibles, and terms can be set based on the company’s actual risk appetite. On top of that, captives provide full ownership of claims data, helping businesses spot patterns and strengthen their risk management programs.

 

Proof Across Industries

Captives are not a theory—they’re working solutions across industries. Capterra Risk sees this every day with our clients. Medical practices use captives to cover insurer reimbursement delays due to cyber issues. Construction companies use captives to address workmanship claims. Businesses make claims due to contingent business interruption from hurricanes and flooding. Tech firms cover fast-changing exposures like cyber liability and professional indemnity. Manufacturers often bundle property, liability, warranty and supply chain coverage into their captive, creating comprehensive protection. To read more about these case studies, visit this resource center.

Hard markets are inevitable, but they don’t have to dictate your costs or limit your options. Captives give companies a way to stabilize premiums, secure coverage, and take real control of their risk financing. The next hard market isn’t a matter of “if”—it’s a matter of “when.” The real question is whether your business will be ready for market instability with a captive that keeps you in control.

Capterra Risk Solutions Hires Terasa Fenters

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Terasa is a graduate of the University of Pittsburgh, where she earned her degree in Economics with additional coursework in Accounting and Business. She began her professional career in technology sales, working closely with clients to understand their operational needs and deliver effective solutions. Through that experience, she discovered a deeper interest in how businesses manage risk strategically and take control of their long-term financial outcomes.

Her curiosity in the field of risk management eventually led her to Capterra Risk Solutions, where she spent time in a hands-on internship experience working alongside the Capterra team.

That experience sparked a strong interest in captive insurance and solidified her decision to pivot into the industry. Now, as a full-time Account Manager, Terasa is excited to help clients protect and strengthen their businesses through customized risk management strategies. She is currently preparing for her ACI (Associate in Captive Insurance) designation to further deepen her knowledge in the field.

Outside of work, Terasa enjoys traveling internationally, skiing at Mammoth Mountain, and surfing in southern California. Some of her favorite places to explore are the alpine mountains and lakes in northern California.

You can reach Terasa at tfenters@CapterraRisk.com.

Chemical Formulator Leverages Captive to Reduce Premiums at Appropriate Risk Level

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The last few years have been a challenge for businesses and their insurance brokers in trying to navigate what is considered a hard market for commercial insurance.

Several factors drive a hard market, but typically we see shrinking reinsurance capacity resulting in restricted limits and coverage and higher premiums. What was unusual with this hard market was that property was primarily the line of coverage that was leading the hard market.  As a result, companies faced huge increases in premium for the same limits and terms, if those could be obtained. Or firms were forced into a large deductible at reduced limits and coverage in order to keep their premium at the same level.

Premium to Rise 4X

One of our clients, a specialty chemical products formulator, faced such an undesirable situation at their property insurance renewal. The CFO of the company approached us seeking our advice on how they could use their Captive Insurance Company to help reduce the sting of their property insurance renewal during this hard market. They had received word from their broker that their property premium was going from just under $200,000 annually to approximately $800,000 for the same limits and coverage terms.

The Game Plan

We suggested that our client ask the broker to obtain large deductible options from carriers in the commercial market that would be willing to offer that type of program.  We would then have the Captive provide a Deductible Reimbursement Policy for the chosen deductible to fully cover the deductible amount or a significant portion of it.

The broker was successful in getting a carrier to underwrite the program with a $1,000,000 deductible, which was what the client desired.  The commercial carrier issued a policy for the full limits desired with a $1,000,000 deductible as the initial layer that the client would be responsible for.  The client saved approximately $441,000 in premium with this option.

Selecting Appropriate Risk Level

The client then decided that their risk tolerance was $250,000 per claim, so they requested that the Captive write the Deductible Reimbursement Policy at $1,000,000 with a $250,000 deductible.  In other words, the captive would cover the $750,000 excess of the $250,000 retained by the client on a per-claim basis.  The premium for the Deductible Reimbursement Policy was approximately $175,000, so the net premium savings was approximately $266,000.

The client was able to deduct the premium for the Deductible Reimbursement Policy, just like they would for any of their other commercial premiums.  Therefore, they were able to achieve significant premium savings while having the coverage they desired for their risk tolerance.  They would also be able to capture profits from the favorable loss experience of the Captive while maintaining the deductibility of the premiums paid.  We felt this was a positive outcome for the client, who was in a difficult situation; this case demonstrates how valuable a captive can be.