HDI Global continues to experience significant growth in its captive fronting business in the United States, largely driven by property and new formations, according to Jason Tyng, vice president of the US captive solutions group at HDI.
Speaking on the latest episode of the Global Captive Podcast, Tyng said HDI’s US captive portfolio had grown 30-40% year-on-year with the majority of it being driven by property programmes and an increase in new formations partnering with the industrial insurer.
“The demand has been tremendous,” he said on the podcast.
HDI began offering fronting solutions for US workers’ compensation programmes in 2024 and Tyng said they are “95% of the way there” towards going live with auto.
“HDI is very methodical in our approach, so we have taken our time and assessed where we want to be a player at, in what particular segment,” he explained.
“Once everything is finally rolled out, which I expect will be January of 2025, we’re going to be in a great position to be successful and really start servicing our clients better.”
Within HDI’s growing book of business in the US, Tyng said around 70% is coming from new captive formations and, especially in the property space, HDI’s experience as an industrial insurer means it feels comfortable supporting certain programmes that may be less mainstream.
He added that while the property market may have stabilised to some degree, rates have remained high and so captive layers are being adjusted rather than removed altogether.
“The folks that were thinking about putting property in captives are still thinking about putting property in captives, because they don’t want to be so much concerned about the changing rate environment all the time,” Tyng explained.
“Now the rate softening has given them a little bit of a pause, they’re not really out of the captive market, they’re just changing where their captive is going to participate.”
He said insureds may now “ease into” property instead of taking a large layer straight away in their captive and follow a five-year plan.
“I’m going to start small and maybe with a deductible buy down, instead of having to take an entire primary 10 million,” Tyng added in reference to the attitude he is seeing from some captive owners.