The Broker Guide to Captives

Why is choosing the right long-term captive partner so important?

For brokers and their clients considering a captive solution, it’s important to remember that they’re not making a short-term decision or completing a transaction. They’re committing to a long-term business strategy. Decisions made today can impact the captive for years to come, so having a trusted consultant who can help balance short- and long-term decision-making is crucial to the success of the strategy.

What are the top three things that guarantee a good client experience, and how does a long-term partnership with a broker and captive consultant help to foster those?

One, consistency. Ultimately, the ideal situation is where clients and their brokers don’t have to reexplain or resell their business every single year at renewal to new partners. A long-term, committed team of captive experts can retain the institutional knowledge that helps make the captive more successful and maximizes its long-term value.

Second, transparency. We’re talking about a client going from renting insurance to owning insurance, so any owner of a business should want and expect transparency. That transparency creates a culture of accountability and greater alignment among the client, broker, captive consultant, and other professional partners working in the captive’s best interest.

Third, flexibility. The model itself, industry-wide, is tried and true. But that doesn’t mean you get complacent. Being able to develop innovative solutions within a model that has such a strong track record is important.

Innovative is in our name. We’re constantly challenging ourselves to find new ways to deliver effective strategies to our clients, whether big or small.

What services should a broker expect from a long-term captive partner?

Any credible captive consultant will provide, or at least discuss providing, a similar suite of services, whether that’s evaluating fit, captive formation, or ongoing management.

But I think the most difficult thing to quantify is what the experience is actually like in working with the consultant. We encourage prospective members and broker partners to speak with ICS captive members who have been around for a while. Why did they choose this model over another? Why have they stayed for five or 10 years? Once somebody joins one of our captives, we have over a 98% retention rate.

All of that goes into doing your homework: speaking to referral sources, industry peers, and really looking under the hood of what it’s going to be like working with that captive consultant as a business partner rather than just another vendor or market option.

What role should the broker play, and how can a broker-centric captive model strengthen the client relationship?

From Day One, we’ve maintained a broker-centric model rather than viewing the broker simply as the means to acquiring new captive clients. We want to equip our broker partners with the information they need to lead day-to-day communication with the client, answer questions, and remain at the center of that client relationship.

The first thing we preach to our broker partners is owning the captive idea. If they’re not talking to their clients about captives, a competitor will. Don’t assume the client wouldn’t want a captive or that a captive won’t work for them. Let the captive consultant be the bad guy if the client doesn’t qualify. But at least you’ve done your part in bringing new ideas to the table.

We also want brokers to be true partners throughout the captive experience. They’re invited to captive board meetings, safety and risk control workshops and other events. That involvement gives them greater visibility into the captive and creates additional opportunities to deepen their relationship with the client. When brokers stay at the center of that relationship, clients stay too. It’s a big part of why our members, and the brokers who bring them, tend to stick around for the long run.