Mature captives can unlock new opportunities, says Pinnacle’s Freihaut ahead of VCIA 2026
Captive owners should be thinking beyond dividends as their insurance companies mature, according to Derek Freihaut, principal and consulting actuary at Pinnacle Actuarial Resources, who will explore the next stage in a captive’s evolution during a panel session at the 2026 VCIA Conference.
Freihaut will present Evolution of a Captive – Capitalising on Opportunities on 11 August alongside Marc Bentley, head of global risk finance at IHG Hotels & Resorts, and Matt Gravelin, managing director at Brown & Brown.
The session will examine how organisations with established captives can make better use of accumulated surplus and stable underwriting performance to support broader risk management objectives.
“As the captive successfully matures and gets through a few years with a few established coverages, and the captive has grown and built surplus, the question may become: are there strategic options with respect to that captive?” Freihaut said.
While returning surplus to the parent company through dividends is one possibility, he said organisations should also consider how the captive could deliver greater long-term value.
“There might be discussions about whether or not the captive should go through a dividend process,” he said. “Dividends may be attractive, but there are other strategies that the captive might consider taking advantage of. The captive may better serve the organisation by offering new coverages, expanding upon what it offers to the organisation, or raising limits and bringing in excess layers to serve areas that have become more difficult in the marketplace.”
Those opportunities extend beyond traditional casualty programmes. Freihaut said mature captives are increasingly being used to address risks that are either unavailable or prohibitively expensive in the commercial insurance market.
“A captive can expand protection beyond traditional lines,” he said. “It might mean bringing in coverages that aren’t available in the marketplace, or coverages that have simply become difficult to find or become overly expensive.”
Property insurance has emerged as one of the clearest examples of this trend.
“We’ve seen a lot of mature captives look into options to assist their organisations with their property coverage, given how tight the property market has been in recent years,” Freihaut said. “In the traditional market, they have experienced premiums that increased significantly or dealt with reductions in the amount of coverage through higher deductibles or deductibles specific to certain exposures. A mature captive can be utilised to expand coverage to address those issues.”
Rather than focusing solely on theory, the panel will feature a practical case study presented by Bentley, drawing on his organisation’s own experience.
“Marc will discuss a captive they’ve had for many years and, as it has matured, the options they’ve considered and the paths they’ve taken,” Freihaut said. “He will walk the audience through a case study with first-hand experience about the decisions they made on what to do with their mature captive.”
Among the session’s key takeaways, Freihaut said delegates will learn how captive owners can expand their programmes without taking on disproportionate risk.
“We want attendees to know how they may increase the amount of exposure that’s covered in the captive while managing the risk to the captive,” he said.
The panel will also explore when a re-feasibility study becomes necessary as captives evolve.
“Our hope is that VCIA members who work with mature captives will get insights into different directions they may consider to get the most value out of their captive,” Freihaut said. “Re-feasibility studies can facilitate that process, and we’ll discuss their purpose and necessity in greater detail, along with what is involved in conducting re-feasibility studies.”
Did you get value from this story? Sign up to our free newsletters and get stories like this sent straight to your inbox.
