Captive expertise and strategic innovation

Captive International talks to Jeremy Colombik, managing partner of MSI, about what the company can offer as our Company of the Month.

With more than two decades of experience in the captive insurance industry, Jeremy Colombik stands at the forefront of innovative insurance solutions for a wide spectrum of businesses. As a licensed CPA and managing partner of Management Services International (MSI), Colombik leads a firm renowned for its strategic approach to captive insurance structures, tailored risk management and reinsurance solutions.

MSI serves an impressive range of clients, from modestly sized enterprises generating a few million dollars in annual revenue to global corporations valued in the billions. The company provides a variety of captive structures, including those that make 831(b) or 831(a) tax elections, as well as protected cells and pure captives.

Colombik explains: “We deal with smaller types of businesses all the way up to multi-billion-dollar corporations. So we do captive solutions from small captives to larger structures like 831(a)s and in between.”

What sets MSI apart, he says, is its flexibility in structuring risk. “We allow our clients to take on as little or as much risk as they want. That really differentiates us from many other captive managers.” This customisation is especially appealing to organisations seeking more control over their insurance spend while managing volatility through tailored risk solutions.

Collaboration with other captive managers

Interestingly, MSI doesn’t only work with end clients. Other captive managers often seek its assistance – not for captive formation or management, but for support in accessing excess insurance and reinsurance markets. This is made possible by MSI’s robust network of strategic partnerships.

“Other captive managers come to us for help in getting excess insurance or reinsurance, which we can facilitate through our various partnerships,” says Colombik.

The reinsurance advantage

A major area of expertise for MSI lies in reinsurance strategies. Colombik is quick to point out that its approach goes beyond the conventional use of reinsurance simply as a buffer against large or unexpected claims.

“I like to look at captives that are seasoned, that have sufficient surplus,” he explains. “We try to leverage that surplus so that the captive can take on a piece of a reinsurance programme. That allows them to earn additional profit.”

However, he stresses that this strategy is not without complexity. There are several key considerations when engaging in reinsurance, such as the treaty date – January 1st or October 1st, for example – which affects unearned premium and required collateral levels. A solid understanding of a programme’s historical performance is also vital.

“New programmes aren’t necessarily bad, as long as the people behind them have a consistent and seasoned loss history. But you’ve got to evaluate it carefully,” says Colombik.

He also notes a critical point when assessing a carrier’s involvement in a programme: “Does the carrier take on at least 20% of the programme? You want the carrier to have skin in the game. If not, they might not be as engaged – they’ll just collect a fronting fee.”

Rated carriers and the role of MGAs

When it comes to reinsurance and programme participation, rated carriers play a crucial role. But accessing them directly can be a challenge.

“These programmes are definitely with rated carriers,” Colombik affirms. “That’s why it’s important to work through MGAs [managing general agents], who have established relationships and access to those rated carriers.”

By leveraging MGAs, MSI ensures their clients benefit from both access and credibility in the marketplace, which is essential when building or participating in more complex risk-sharing arrangements.

Final thoughts

Colombik’s insights underscore the evolving sophistication of the captive and reinsurance markets. Through MSI, he offers not only technical expertise but also strategic agility – enabling businesses to harness captives and reinsurance programmes for financial stability, risk diversification and long-term gain.

Whether it’s helping other managers find reinsurance partners or guiding clients through surplus-leveraging strategies, Colombik and his team at MSI continue to push the envelope in captive management and innovation.

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