Best Way Prepare Your Clients for the Captive Underwriting Process

When your client is exploring captive insurance, they’ll quickly learn it’s a completely different approach to how they buy and handle insurance. And it comes with a rigorous underwriting process that asks tough questions most traditional insurers never bother with.

As their agent, you want your client to look like the best possible candidate. Help them come prepared so they can prove they’re ready for a captive.

At Captive Coalition, our sole purpose is to work with and educate independent agents so they can help their best clients and maintain their book of business. We work with independent agents to help guide their clients through the underwriting process with clarity and confidence. 

This article breaks down what the captive risk committee and/or state regulator is really looking for, what your client needs to demonstrate, and how you can help them put their best foot forward.

Why Is the Captive Underwriting Process Different?

Unlike the traditional market, the captive underwriting process isn’t just about ticking boxes and moving on. It’s about evaluating whether your client is prepared to take on more control, responsibility, and ultimately, more risk. This process is about how intentional they’ve been in running a safe and efficient operation.

Captives reward businesses that aren’t just lucky but are proactive. The underwriting process is designed to uncover if your client’s positive claims history is the result of deliberate risk management or just good fortune. The committee will also evaluate if your client has the mindset and financial readiness to step into captive ownership.

It’s about protecting the captive and every member in it.

The Three Main Questions Every Captive Risk Committee Asks

The captive underwriting process is centered around three main questions. As your client’s agent, you need to help them anticipate and answer these questions convincingly:

1. Is your client profitable to the insurance industry today?
   It’s about the numbers. The committee wants to know if your client is consistently profitable in the traditional market. If they’re paying high premiums without many losses, they likely are.
   
   
2. Does your client have the right mindset for captive ownership?
   Being in a captive isn’t just about saving money. It’s about committing to continuous improvement. Is your client ready to own their risk? Are they committed to making ongoing investments in safety and loss control?
   
   
3. Is your client’s loss history the result of skill or luck?
   A good loss history is helpful, but it’s only valuable if it’s intentional. The committee needs proof that your client’s strong performance is due to formalized safety programs, management oversight, and processes, not just a streak of good luck.

What the Captive Risk Committee or Regulator Is Looking For

Captive risk committees are looking for intentionality, awareness, and a willingness to improve their safety and risk management programs.

They want to see that your client:

• Understands their risk exposures and how to control them.
  
  
• Has a history of low or well-managed claims. And if not, has taken steps to fix the problem.
  
  
• Is prepared to operate like an insurance company owner, not just a buyer of coverage.
  
  
• Isn’t joining a captive because it “sounds like a good deal,” but because it aligns with their long-term business strategy.

Help your client show up to this process with clarity. If you can walk in with a clear understanding of your client’s risk profile, documented improvements, and a proactive mindset.

How Agents Can Help Clients Prepare

The best way to prepare your client for the underwriting process is to guide them through a two-step approach:

1. Help them understand the captive mindset:
   Clients need to realize that joining a captive is a long-term strategy. They are moving from just buying insurance to taking control of risk. The underwriting committee wants to see that your client understands this shift and is ready for it.
   
   
2. Audit their current risk management program:
   Underwriters want to see a clear, structured approach to safety and loss control. As their agent, you encourage your client to assess their:
   
   
   • Formal safety programs
     
     
   • Training processes
     
     
   • Claims history trends
     
     
   • Employee engagement with safety measures
     
     
3. The better documented and intentional these programs are, the better your client looks to the committee. If your client doesn’t have a documented risk management program, it may as well not exist in the eyes of a captive underwriter.

Where to Start When Helping Your Client Prepare

The most direct way to help your client is to encourage a full audit of their current safety and risk management program.

This doesn’t have to be overwhelming. It’s about getting an honest look at how they currently operate and where gaps might exist. Your client should be able to answer these core questions:

• How is risk currently being managed in the business?
  
  
• What formal safety programs are in place?
  
  
• How consistently are those programs implemented?
  
  
• What is the documented claims history, and what were the root causes?

Helping them gather this information prepares them for the underwriting committee and often leads to immediate improvements in operations, even before joining a captive.

Do a Pre-Underwriting Audit

The best way you can help your client prepare is by leading them through a simple but thorough pre-underwriting audit. This is about helping your client take ownership of their risk profile.

Encourage your client to:

• Conduct a genuine review of their safety and risk management programs.
  
  
• Evaluate their claims history, including trends, patterns, and outliers.
  
  
• Identify where their current risk management is strong and where it needs work.
  
  
• Be honest about whether past success is the result of sound practices—or just good luck.

When you help your client do this work upfront, you’re presenting them as an ideal candidate for a captive.

Where to Start When Auditing Your Client's Risk Management?

Your client will need a clear, organized view of their current safety and risk management practices before stepping into the captive underwriting process. 

Identifying gaps, highlighting strengths, and preparing a narrative that shows the client is serious about risk management. Show that they’re not just lucky.

Focus the audit on:

• The client's loss history and claims patterns.
  
  
• Current risk mitigation programs.
  
  
• Safety culture and employee engagement.
  
  
• Processes for monitoring and improving risk management.

How This Preparation Benefits Both You and Your Client

Helping your client prepare for captive underwriting is about creating a win-win, especially when your client successfully becomes a captive owner.

For your client, preparation ensures they’re not wasting time or money applying for something they aren’t ready for. It also gives them clarity on where their safety and risk management programs stand and what improvements might be needed.

For you, the agent, you’re doing more than quoting premiums. You’re helping them take a serious look at their operations, making them stronger and ultimately making you indispensable.

Preparing Sets Your Client Apart

Captive underwriters look for perfection. They want prepared businesses. When your client takes ownership of their risk profile and shows they’re intentional about how they manage claims and safety, they become an easy “yes” for the captive committee.

Next, read our article on the upfront costs of joining a captive insurer. That way, if/when they do get into a captive, they understand how much they’ll need to put in financially. 

Want to make sure your client is ready for captive underwriting or learn more about captives? Become a member of Captive Coalition for FREE to get access to resources, checklists, and expert guidance to help clients and maintain your book of business.