Group. Cell. Pure. We Know Them All.
A captive insurance company is owned by you — transferring risk management from traditional carriers to your hands. Understand the structures, weigh the trade-offs, and find the model that fits your business. We'll walk you through it.
Traditional insurance puts all power in the hands of carriers. You pay, they keep profits. Rates climb. Control vanishes.
You pay premiums to traditional carriers. Whatever they don't spend on claims becomes their profit. You see nothing. That capital is gone forever.
In a captive, unused premium becomes a strategic reserve. Your company grows capital. You access this when needed. Profits stay in your ecosystem.
Traditional insurers set rates with little transparency. Competitors bid against you. One bad loss and your renewal rate skyrockets regardless of fairness.
In a captive, actuarial data is yours. Loss performance is transparent. Rate adjustments align with actual experience. No carrier markup. Pure economics.
Soft markets fade. Hard markets strike. Your business may be fine, but industry trends pull rates up 15-20% annually with no recourse.
Captives smooth volatility. Good years build reserves. Hard markets become manageable. You're not at the mercy of industry rate cycles.
You'll never own the traditional insurance company. The relationships you build have no equity. You're forever a customer with no skin in the game.
A captive is an asset you own. Build value over decades. That equity transfers to successors or new owners. Your investment compounds.
A captive insurance company is an insurance entity created by and for a business or group of businesses to insure their own risks. Rather than transferring all risk to a traditional carrier, captive owners retain a portion of underwriting profit.
Three proven structures — each with different trade-offs for control, cost, and coverage flexibility.
A collective insurance company owned by multiple participants. Shared governance, shared claims experience, shared reserves. Best for businesses seeking lower entry costs and broad diversification.
No property, professional liability, cyber, excess, or D&O coverage available.
A dedicated insurance company within a larger protected structure. Your reserves are yours alone. Dedicated claims management. Full coverage flexibility. PFTN offers proprietary access through our HybridRE program.
Cover virtually any insurable risk — no restrictions.
Wholly owned by a single business. Complete control. Complete responsibility. Full claim experience rating. Premium requirements typically $1M+. Maximum flexibility for large enterprises.
Captives are flexible. Cover traditional lines or build creative strategies. Here are common coverages:
Tennessee has posted six consecutive years of captive growth. With 184 captives and 703 active cells writing $4.2 billion in premiums, the state is one of the fastest-growing captive domiciles in the country.
Tennessee undertook a major rewrite of its captive laws in 2011, with subsequent updates in 2016, 2017, 2019, and 2021. The result is one of the most modern and flexible captive statutes in the United States, expanding permitted captive types and coverage lines.
The Tennessee Department of Commerce & Insurance (TDCI) combines responsible regulation with a customer-focused approach. Dedicated captive professionals provide responsive oversight without burdensome red tape, making Tennessee one of the easiest domiciles to work with.
Tennessee offers a one-year premium tax exemption for captives redomesticating from non-U.S. domiciles. Dormant captives require only $25,000 in capital and surplus and are exempt from premium taxes. Investment flexibility allows captives to invest in approved securities with commissioner approval.
Tennessee's captive premium volume doubled year-over-year, reaching $4.2 billion in 2025 compared to $2.1 billion in 2024. The state licensed 5 new captive companies and 50 new cells in 2025 alone, bringing the total to 184 captives and 703 active cells.
Captives are no longer limited to traditional casualty. These are the lines driving new formations and expanded retentions in 2025-2026.
Hard property markets and catastrophe exposure are pushing real estate and construction firms toward captive solutions. Captives offer stability that the traditional property market can no longer reliably provide.
One of the most common captive lines. Retaining general liability in a captive gives you direct control over claims management, defense strategy, and reserve development — instead of handing it to a carrier.
Nuclear verdicts and social inflation are driving transportation and fleet-heavy businesses toward captives. Retaining first-dollar auto risk reduces exposure to volatile carrier pricing and rewards good drivers.
Captive-funded workers' comp ties safety culture directly to financial performance. Better loss control means lower costs and underwriting profit that stays with your company instead of a carrier.
Excess liability rates have surged due to social inflation and rising verdict sizes. Captives let you retain higher layers strategically, smoothing cost volatility and building reserves in favorable years.
Emerging risk categories that traditional markets struggle to price. Captives give organizations the flexibility to build custom coverage for risks that don't fit neatly into standard commercial policies.
We've been guiding Tennessee businesses through alternative risk transfer for over a decade. Here's what we bring to the table:
We don't just broker captive insurance. We've structured and managed single-cell and group captive programs for 50+ Tennessee businesses. We know what works and what doesn't.
All our captive partnerships carry A.M. Best ratings. Strong financial security. Regulatory oversight. Peace of mind that your insurance structure is solid and recognized.
Captives need discipline. We partner with world-class loss control consultants to help your organization reduce claims frequency, improve safety culture, and build actuarial advantage.
No hidden underwriting. No carrier markup. You see exactly how premiums flow into reserves, how claims are paid, and how equity builds over time.
We represent you to underwriters, regulators, and program managers. If questions arise, we're your advocate. Your success is our success.
Based in Knoxville, serving Tennessee. We know local business. We're accessible. You're not dealing with an 800 number—you're dealing with us, directly.
Everything you need to know about captive insurance — structures, costs, coverage, and how to get started.
Captive insurance is a privately owned insurance company created by and for a business or group of businesses to insure their own risks. Rather than transferring all risk to a traditional carrier, captive owners retain a portion of underwriting profit.
Costs vary by captive type. Group captives typically require $250K-$1M in annual premiums. Cell captives range from $500K-$2M. Single parent captives generally require $1M+ in premiums. Capital requirements can be as low as $25K for cell structures.
It depends on the captive structure. Group captives are typically limited to three lines: general liability, workers' compensation, and auto. That's it — no property, no professional liability, no cyber, no excess coverage. Single-cell and pure captives, on the other hand, can cover virtually any insurable risk — including property & catastrophe, general liability, auto, workers' comp, excess/umbrella, cyber liability, professional liability, directors & officers, employment practices, equipment breakdown, supply chain risk, and more. This coverage flexibility is one of the biggest reasons businesses move beyond the group model.
Establishment typically takes 4-6 months. Cell captives are faster, often 2-3 months. The timeline depends on regulatory approval, documentation requirements, and your program's complexity.
Any profitable business with sufficient premium volume ($250K-$1M annually) is a potential candidate. The ideal captive participant has stable operations, good loss history, and commitment to risk management.
Captives are regulated by state insurance departments. Requirements include capital and surplus minimums, annual filings, reinsurance requirements, and compliance with solvency and reserve standards. Tennessee's TDCI is known for responsive, customer-focused oversight with one of the most modern captive statutes in the country.
Tennessee has posted six consecutive years of captive growth, with 184 captives and 703 active cells writing $4.2 billion in premiums as of 2025. The state offers modern legislation (updated in 2011, 2016, 2017, 2019, and 2021), premium tax exemptions for redomestications, low dormant capital requirements ($25K), and investment flexibility. Tennessee's regulatory team is known for being responsive and business-friendly.
The differences are significant. In a group captive, multiple businesses pool their risk and share outcomes — your results are tied to the group. Coverage is typically restricted to just general liability, workers' comp, and auto. Group captives are usually domiciled offshore (Cayman Islands, Bermuda).
In a cell (segregated cell) captive, each participant has a legally segregated account — your assets can't be used for another cell's liabilities. You get dedicated reserves, independent governance, and full coverage flexibility: property & CAT, GL, auto, workers' comp, excess/umbrella, cyber, professional liability, D&O, and more. Cell captives can be domiciled domestically — Tennessee is one of the fastest-growing domiciles — with entry points starting at $250K, comparable to group captive levels but with none of the coverage restrictions.
Group captives pool risk across multiple participants, which limits coverage to the lines everyone shares in common — typically just general liability, workers' compensation, and auto. Adding specialized lines like property, cyber, professional liability, or excess/umbrella would require unanimous agreement and create adverse selection issues within the group.
This is a core limitation of the group model. With a single-cell or pure captive structure, you have your own segregated entity with independent underwriting authority. That means you can insure property & catastrophe, cyber liability, professional liability, directors & officers, excess/umbrella, employment practices, supply chain risk — essentially any insurable exposure your business faces. You're not constrained by the group's lowest common denominator. PFTN offers proprietary access to cell captive structures through our HybridRE program.
Captive underwriting expense ratios average around 9%, compared to 31% for traditional insurers. That means for every dollar of premium, captives keep significantly more in reserves and profit. Combined with an average combined ratio of 83% (vs. ~100% for traditional carriers), captive owners typically earn around 44% profit on premium over a five-year average.
Property & catastrophe coverage leads the way, driven by rising natural disaster losses and hardening reinsurance markets. General liability and auto liability remain strong growth areas, fueled by nuclear verdicts and social inflation. Workers' compensation, excess/umbrella liability, and supply chain & climate risk are also gaining significant traction. These lines are generally available through cell and pure captive structures — group captives are typically limited to GL, workers' comp, and auto.
Industry insights. Captive strategy. Practical guidance to optimize your alternative risk program.
The regulatory ground under mental health parity shifted in 2025, but the statutory obligation did not. For self-funded employers, MHPAEA remains a fiduciary duty you carry directly — enforcement pause or not.
Read Article →A single clause in a network or administrative-services agreement can forbid a self-funded plan from seeing its own cost and claims data — and the CAA makes the employer, not the carrier, prove those clauses are gone by December 31. What the 2026 gag-clause attestation requires, and why it strikes at the premise of self-funding.
Read Article →Mercer projects the steepest employer health cost increase in fifteen years for 2026. Why mid-market employers are moving from the fully-insured renewal to a member-owned group-health captive — the funding continuum, claims transparency, and the ownership the structure demands.
Read Article →The manufacturing floor writes its own claims story — an aging workforce, musculoskeletal wear, and rising specialty-pharmacy cost. How a group medical stop-loss captive smooths renewal volatility and lasering, and gives the employer ownership of its underwriting margin.
Read Article →Hospitality and restaurant operators feel 2026’s double-digit health cost increases more than most — high turnover, hourly workforces, and thin margins. How a group health captive gives a mid-market operator transparency, retained savings, and control over a cost the fully-insured market keeps opaque.
Read Article →A single dialysis patient can reshape a self-funded plan year. How end-stage renal disease concentrates cost, why the Marietta v. DaVita ruling hands plans a reimbursement lever, and how stop-loss and captive structure let a mid-market employer own the exposure deliberately in 2026.
Read Article →One air-ambulance flight can rewrite a plan year. For self-funded employers, the No Surprises Act moved that exposure from the member to the plan document — and 2026's IDR backlog and QPA litigation raise the stakes for the sponsor who pays.
Read Article →Pharmacy is now roughly a quarter of health-plan spend and the part that behaves least like insurance. New 2026 PBM transparency rules give self-funded employers leverage — and the group-health captive gives them a structure to carve out specialty and GLP-1 exposure and control it.
Read Article →ERISA fiduciary-breach litigation has crossed from retirement plans into self-funded health and pharmacy costs. What the CAA changed, where Lewandowski and Navarro stand, and how plan sponsors build a governance committee, a documented prudent process, and the right fiduciary-liability coverage.
Read Article →Approved gene and cell therapies now carry multimillion-dollar price tags. How self-funded employers can uncover the exposure and design plan and captive layers around it before the claim arrives.
Read Article →Reference-based pricing reprices claims off Medicare instead of a hospital chargemaster, and can cut claims spend 20 to 30 percent. The balance-billing risk it creates, why the No Surprises Act does not cover it, and the fiduciary and stop-loss discipline it requires.
Read Article →As 2026 renewals hit a fifteen-year high, employers with 20 to 200 employees are looking past ACA community-rated coverage. Level funding sits between fully insured and self-funded — fixed monthly cost, surplus upside, and the claims data self-funding is prized for.
Read Article →Wegovy and Zepbound now list north of $1,000 a month, and GLP-1s have become the single largest force reshaping self-funded pharmacy spend in 2026. Where the exposure lives, why PBM rebates obscure it, and the plan-design levers that control trend.
Read Article →The median trucking nuclear verdict is now $51M, and commercial auto has been unprofitable for 14 straight years. The group captive is the structural response the mid-market fleet has been chased toward for a decade.
Read Article →The January 2026 medical stop-loss renewal averaged +23%. Gene therapies and GLP-1s have entered the working claim. The medical stop-loss group captive is the vehicle the standard market has chased self-funded employers toward for three years.
Read Article →The strongest captive is the one whose board meeting reads like an internal audit. The March 5, 2026 ED Tennessee opinion in CIC Services v. IRS formalized the governance posture that separates a real insurance company from a tax-motivated structure.
Read Article →A captive is not a tax structure with an insurance label. It is an ownership decision. Here is what the financial statement is actually documenting — and what the IRS reads when the captive does not read it that way first.
Read Article →The property market is soft. That's exactly when disciplined organizations should be building captive structures to lock in long-term savings and control.
Read Article →Why property and catastrophe property coverage belong in a captive. How well-managed organizations are owning the risk the market won't.
Read Article →You pay premiums every year. If you don't have claims, that money is gone. Captives change the equation — and the math is hard to ignore.
Read Article →Two captive models, very different trade-offs. Coverage flexibility, governance, cost — we break down what matters for your decision.
Read Article →The best-performing businesses are leaving traditional insurance. The captive market is growing — and the reasons go deeper than cost savings.
Read Article →AM Best ratings are the gold standard in insurance. Here's what they measure, why they matter, and what to look for in a captive program.
Read Article →