Sunday, April 21, 2024

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Captive Resources targeting $5bn annual premium, exploring property programmes

Property programmes could be a future addition to group captives that are consulted on by Captive Resources, according to CEO Nick Hentges.

Speaking on the Global Captive Podcast while at the CICA International Conference in March, Hentges said the annual premium flowing through its group captive portfolio had now reached $4.3bn, having crossed $4bn in 2023.

“We added about 600 members last year,” he said. “We grew by a little over $500m in premium. Some of that’s exposures, a lot of that is new members. We think that we will get close to $5bn by the end of this year.”

The premium volume is a combination of casualty and medical stop loss, with 70% of the casualty book made up of workers’ compensation premium.

Hentges has been vocal about the company’s plans to make further inroads into the medical stop loss space, where he sees huge opportunity for growth and utilisation of the group captive concept.

“On the casualty side, I would say we have a pretty good lead on folks,” he said. “On the medical stop loss side, we are chasing. We are not a new entrant, but we’re a smaller entrant. We have got very serious about it.

“On the casualty side, we think there are 65,000 companies in the US that would fit one of our captives. We write 6,000 of those.

“On medical stop loss, we think there’s 175,000 companies that would fit what we want to do. And we write 400 of those. If you totalled everybody up that’s in the space, it’s maybe 5,000 companies, so there is tremendous opportunity.”

A further indication of CRI’s growth in medical stop loss is the fact four years ago, its MSL department consisted of three people. By the end of 2024, Hentges expects it to have up to 70.

While casualty, particularly workers’ compensation, and more recently medical stop loss have been what Captive Resources is best known for, Hentges did not rule out entering other lines of business.

America’s property insurance market has been particularly challenging for several years and it is an area Captive Resources is going to take a closer look at to see if property programmes could suit group captives.

Hentges said on the podcast: “I’ve been at the CICA conference now for two days and I bet I’ve had 10 people come up and ask, ‘can you do a property programme’ or ‘are you going to do a property programme? What can you do to help us with property?’

“I make no promises, but we are definitely going to look at property and see if there are opportunities or a niche that we can fill.

“It is tough and pricing has gone up dramatically, but it’s now to a point where the pricing probably makes sense. And if we jump in and can find the right niche, we think it could be a valuable add to the marketplace.”