Captive insurance becoming attractive to more midsize companies

Range of structures offer more options to cover exposures

Growing sophistication among mid-market executives who want to find a better way to finance the risks their companies face is driving many midsize businesses to turn to captives as an alternative to traditional insurance, experts say.

While group captives often are the entry point to alternative risk transfer for many middle-market organizations because they require less capitalization than single-parent captives, many mid-market executives also are showing interest in what are known as segregated or protected cell captives as well as micro captives, the experts note.

"You will always find companies with good loss experience that want to profit-share with other companies," said Lisa Wall, senior vp of captive consulting at Lockton Cos. L.L.C.

Although group captives require lower startup costs because each member contributes, Ms. Wall and other captive consultants say they also are seeing interest among mid-market executives in single-parent captives and protected cell captives, which basically are a collection of single-parent captives within a captive.

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