Is Captive Insurance Right for You?

• Captive insurance gives businesses greater control over long-term insurance costs.
• Companies with strong safety records and stable operations are often strong candidates.
• TRB Insurance recently helped two Texas companies secure six-figure annual savings—approximately $200,000 and $150,000—using a captive strategy.
• Captives can reduce premium volatility, improve claims management, retain underwriting profits, and create opportunities for investment income on premiums.

What Is Captive Insurance?

A captive insurance company is a legally formed, wholly owned insurance entity created to insure the risks of its parent company. Instead of purchasing coverage from the traditional insurance market, businesses can use a captive to:

• Establish greater control over coverage structure
• Stabilize long-term insurance costs
• Improve claims visibility and loss-prevention strategy
• Retain underwriting profits in favorable years
• Earn investment income on premiums paid

How Captive Insurance Works

A captive insurance program typically includes three core components:

1. Formation & Feasibility: A business undergoes a detailed feasibility review to determine whether its risk profile, safety performance, and financial stability make it a strong candidate.
2. Premium Structure & Coverage Design: The captive is structured to insure specific lines of coverage—often General Liability, Business Auto, and Workers Compensation—based on the company’s historical loss performance.
3. Long-Term Operation & Value Creation: Over time, strong-performing companies can benefit from:
   • Reduced premium volatility
   • Underwriting profit retention
   • Improved loss control
   • Investment income on reserves
   • Transparent claims management

Benefits of a Captive Insurance Strategy

Captive insurance can provide meaningful long-term value, including:

• Stability in Insurance Costs: Predictable premiums and reduced exposure to market swings.
• Improved Risk Management: Greater visibility into claims and loss drivers.
• Underwriting Profit Retention: Profits remain with the business rather than traditional insurers.
• Investment Income Opportunities: Premiums held in the captive can generate investment returns.
• Customized Coverage: Tailored programs designed around a company’s actual risk, not broad market averages.

Case Study: TRB Insurance Saves Clients Six Figures

Two established Texas industrial companies were facing unpredictable year-over-year premium increases. TRB Insurance introduced a captive strategy that helped both clients:

• Reduce annual premiums by approximately $200,000 and $150,000
• Gain greater control over long-term insurance costs
• Improve loss-prevention strategies
• Create opportunities to earn investment income and retain future underwriting profits

For both companies, this approach is expected to deliver millions in long-term value through improved cost stability and stronger claims performance.

Who Qualifies for Captive Insurance?

A captive strategy is typically a strong fit for:

• Businesses with proven safety records and favorable loss histories
• Financially strong companies with consistent operational performance
• Organizations seeking long-term cost stability and risk transparency
• Owners open to alternative insurance structures
• Companies committed to proactive risk management
• Businesses with $100,000+ in annual combined premiums (General Liability, Business Auto, and Workers Compensation only)

If you are not yet a commercial client with Texas Regional Bank, speak with our Business Banking team to explore how you can access the full capability of TRB’s financial services.

Why Choose TRB Insurance

TRB Insurance brings together specialized captive-insurance expertise and the flexibility of an independent agency. This model allows our team to evaluate coverage across multiple carriers and structure captive programs that reflect each company’s unique risk characteristics and long-term goals. Our advisors are based in the communities we serve and understand the industries and risk patterns shaping the Texas business environment. For organizations seeking stability and greater control over their insurance strategy, a captive can offer meaningful advantages—and we can help you assess whether it is the right solution.

Disclosures

INVESTMENT AND INSURANCE PRODUCTS ARE NOT A DEPOSIT / NOT FDIC INSURED / MAY LOSE VALUE / NOT BANK GUARANTEED / NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY / ARE NOT A CONDITION TO ANY BANKING SERVICE OR ACTIVITY