Insurance Market Overview

Did you know that self-funded employers regularly transition to benefits captives? Benefits captives are often viewed as a destination for only fully-insured or level-funded employers. However, we are seeing more and more companies who are already partially self-funded decide a captive is a safer long-term play. Why is that? A few things: 1. Large claim volatility has increased substantially. As an example,Tokio Marine HCC has cited a 14.5x increase in the frequency of $2M claims in the last 3 years. 2. Benefits Captives allow you to plan on a multi-year basis. With No New Laser and lower Rate Cap protections that cannot be removed like in the traditional stop loss market, captives offer more stability in budgeting over multiple years. 3. Benefits Captives are not just about better stop loss. Captives like ParetoHealth use their size and scale to procure better claims solutions on behalf of their risk pool. Claims usually make up 60-70% of plan spend, and buying cheaper stop loss doesn't solve for that. Rising medical trend, and subsequently higher leveraged trend, are making captives a much more attractive long-term home for small to mid-sized employers than self-funding in their own. In the same way you'd prefer to be on a giant cruise ship versus a small bass boat when the seas get rocky, a captive is a safer bet when stop loss markets harden and the cost of care runs amuck. So, are they right for everyone? No! Captives require a different mindset, and a desire to actively participate with like-minded employers to solve problems. If you're a self-funded employer, or a consultant who manages them, then there's never been a better time to consider a captive. -Spencer #captives #benefitscaptives #captiveinsurance #selffunding #selffundedwithspencer

Nearly 20 years ago, I asked an underwriter a question that changed how I marketed business. "What do you hate the most about brokers?" We were having drinks at a conference. The tie had been loosened a little. His answer was immediate: "You all lie about urgency. Every deal is hot. Every timeline is critical. It's exhausting. Just tell me the truth. I can handle the truth." He was right. I had been trained to manufacture urgency. Create competition. Make every submission sound like five carriers were circling and the decision had to happen by Friday. The underwriters knew. We knew they knew. It was broker theater. So I tried something different on the next deal: not urgent, good risk, fair timeline, we want to work with you if the terms make sense. No games. The underwriter called almost immediately. "Thank you. Let's price this correctly." That conversation changed everything about how I approach carrier relationships. Real timelines. Actual competition when it exists. Honest feedback. Genuine urgency when it's actually real. It's negotiated better deals. And when claims showed up and we needed those relationships to perform, it mattered enormously. Insurance is still people doing business with people. The market remembers the brokers who play it straight. --- P.S. If this resonated, you'd probably like Boardroom Briefs. Every Friday, we send the three risk events that actually matter for financial institutions — no noise, no filler. Link in bio.

When JD Ross was building Opendoor, no insurance carrier could underwrite an iBuyer.   The portfolio changed every week. Houses came in, houses went out. Standard property carriers couldn't price the velocity. Brokers couldn't design a custom product. Opendoor ended up at Lloyd's of London building a bespoke policy directly with the syndicate.   That experience stuck with him.   If one of the largest iBuyers in the country needed coverage that no American broker could put together, plenty of other modern real estate models were getting failed too.   Insurance has been the most painful line on the real estate P&L for seven straight years. CBRE pegs the value destruction at 3.6% nationally since 2019. Over 10% in some markets. Coastal Florida multifamily owners are renewing at 50%+ increases on policies with zero claims.   And almost nothing in proptech has been built for it.   The reason isn't technology. It's broker incentives.   Conventional brokers are paid 10-15% commission by the carrier. The agent supposedly working for the owner gets paid more when premiums go up. That structure is hostile to innovation. It's also hostile to the alternative structures (captives, pooled risk, self-insurance) that actually solve the problem.   Ross's new company, WithCoverage, is doing two things at once:   • Charging a flat fee directly to the client and waiving carrier commissions • Building software that parses policies, flags coverage gaps, and reconciles lender covenants in real time   The compensation flip is the more important half. When the broker doesn't earn more by placing more premium, captives become a viable recommendation. So do pooled structures that let middle-market operators run on the same footing as Greystar.   Captive economics work above roughly $2M in annual premium. That's 1,500-3,000 units for most multifamily owners. Plenty of operators have been there for years and never heard the suggestion.   There's a reason for that.   Full breakdown of WithCoverage's model, the captive opportunity, and why the broker model has kept insurance frozen in this week's Thesis Driven. Link in comments.

The insurance industry has a built-in tension that shapes the experience you get that most people have no idea exists. And it’s not because there are bad people in it. It’s because the model quietly pulls people in the wrong direction. Here’s the part most business leaders never see: In many brokerage firms, the same people responsible for advising clients are also responsible for generating new business. That means their time and attention are constantly being pulled in two directions. Serving the clients they already have… And pursuing the next opportunity. This is simply how the model is built. Now think about renewal season. It’s the busiest time of year. It’s when you need guidance, clarity, and focus the most. And it’s also when many advisors are trying to close new business before the year ends. That creates a quiet conflict. Do I spend time deepening strategy with current clients… Or do I go chase the next one? Most leaders never see this tension, but they feel it. And it shapes the experience they have with their broker. Years ago we realized something important. If we truly wanted to put clients first, the model itself had to change. So we devised the roles in a unique way. We redirected the time and energy that risk advisors would normally spend chasing new business back into serving the clients we already had. And we rebuilt our process around year-round proactive risk management. It sounds simple. But it’s not the norm in insurance. That shift allowed us to deliver what the industry often promises but rarely sustains: consistent, proactive, client-first guidance. This isn’t just an insurance conversation. Incentives drive behavior. Behavior drives outcomes. The question isn’t whether your advisor is a good person. The question is whether the model they operate in actually allows them to fully serve you. That’s where the real difference lives.

There’s one part of your insurance renewal that most business owners overlook. And it has nothing to do with your loss runs or class codes. It’s the story your broker is telling about your business. Yes, the math matters. But if you think your renewal is just a numbers game, you’re missing the bigger picture. Underwriters are human. And humans love a good story. Your renewal outcome isn’t just about the data, it’s about how that data is framed. A good broker knows how to connect the dots between your loss history, operations, and risk strategy to tell a story that makes underwriters lean in. They highlight what makes your business better than the rest: • The way you mitigate risk • The strategic growth moves you’re making • The systems you’ve put in place to protect your people, your customers, and your margins The best brokers don’t just tell your story for you, they actually hand you the mic. They bring you into the room (or Zoom) with insurance carriers so you can speak directly to the people pricing your risk. Because no one can convey your culture, your vision, or your leadership mindset like you can. That kind of collaboration can mean better terms, stronger coverage, and real savings. So here’s the question: Are you confident in the story your broker is telling and are you even being invited to tell it yourself? If not, let’s talk. Because letting the wrong person tell your story could be costing you more than you think.

I spent 15 years watching mega-brokers talk about teamwork while their comp plans rewarded the opposite. Every broker claims they're "collaborative" and "client-focused." Here's how we built systems that actually prove it: You see, these numbers - 92% retention, 30% faster delivery, $250M+ recovered in missed claims - aren't the result of just "great service." This happens when culture, collaboration, and client value aren't just mere words on your website. Junior staff churning every 18 months. Senior producers hoarding relationships. Knowledge silos protecting individual books. Clients getting whoever was available, not who was best. When Flip and I built our FI practice, we discovered that: The best outcomes happened when ego left the room. Here's what that actually looks like at LION: 1. We killed the "eat what you kill" model Traditional brokerage: You source it, you own it, you protect it. LION: Shared equity ownership. When a client wins, we all win. No one guards "their" accounts because we all own the outcome. 2. We built an "Elevated Ensemble" approach One client, multiple specialists, zero handoffs. Last quarter, a regional insurer came to us with a complex D&O renewal. Instead of one producer juggling everything, they entered a 150-day process led by senior experts across placement, claims, and risk analytics. The result: 20% improvement in pricing. Six exclusions removed - each with material downside risk. Coverage restructured to perform under real-world pressure. 3. We measure differently Most firms: Individual production metrics drive everything. LION: We track "Collaborative Alchemy" - how often team members tap each other's expertise. The more collaboration, the better the client outcome. 4. Chemistry you can feel When Flip and I pitch together, clients often comment on our dynamic. They're not hiring our expertise. They want to be part of what we've built. And you can't fake that energy. It can only come from genuinely wanting each other to succeed. The compound effect is really the 8th wonder of the world: When one team member spots a coverage gap, that learning immediately spreads to every account. When someone develops a better renewal process, everyone adopts it. When a specialist joins with unique expertise, every client benefits. The old brokerage model rewards individual heroes. We built LION to reward collective excellence. Because in complex risk, the best answer rarely comes from one person. It comes from a team that's structured to share everything. Want boardroom intelligence with zero noise? Every week we share curated insights that cut through the chaos and help you make the best policy decisions. Join here: https://lnkd.in/garzxSxG LION Specialty. The Leader in Institutional Insurance.

In my years, starting from ICICI Lombard to leading APD Insurance Brokers, I’ve often been told to leave empathy out of business. I never could, and honestly, I wouldn’t want to. Motherhood taught me early on that managing risk isn’t just about spreadsheets and rules. When my child falls and scrapes a knee, my first instinct isn’t to calculate the cost of the bandage. It’s to calm and guide. That same instinct drives how I approach risk advisory. It’s anticipating the unexpected, preparing for every scenario, and having a plan B (and C) ready before anyone even asks. Empathy isn’t an emotional add-on to risk management. It is part of the risk management framework itself. Think about it: • A sudden fire halts operations at a warehouse. • A family faces an unexpected health emergency. • A business owner stares at documents they barely understand. In those moments, they are not looking for a “broker.” They’re looking for someone who can translate fear into a plan. That’s where empathy quietly becomes strategy, in subtle, practical ways: • Listening without interruption, even at odd hours of the day. • Reassuring them that they are there for guidance at every step. • Giving them clarity before paperwork. • Keeping steady even when the situation feels anything but that. Empathy doesn’t replace expertise. It strengthens it. In the long run, that’s what builds trust. It’s the most resilient risk management tool any organisation can have. #RiskManagement #EmpathyInBusiness #Leadership #Trust #InsuranceBroker 

I have been in this industry for over 20 years now. You would think the biggest lessons would be about coverage forms or rate structures or claims management. And sure, I have learned plenty about all of that. But most of what I actually learned was about people. 1/ Nobody wants to be sold to. ↘ I learned this the hard way. Early in my career, I would walk into meetings ready to talk about what we offered. The meetings that actually turned into something were the ones where I stopped talking and started listening. People can tell the difference between someone who wants to help and someone who wants to close. Those are two very different things. 2/ The best brokers I know are the quietest ones in the room. ↘ They are not trying to impress anyone. They ask a question and they actually wait for the answer. I have watched them sit in silence while everyone else rushes to fill it. That patience builds trust faster than any pitch ever could. 3/ When someone is being difficult, there is almost always a reason. ↘ I had a client years ago who pushed back on everything. Every email was a fight and I almost gave up. Then I found out his last carrier had burned him badly on a claim, and once I understood that, everything changed. A little patience goes a long way. 4/ People remember how you made them feel. ↘ I have had brokers come back to me 5-6 years later, not because of our rates but because of one phone call where I actually helped them when they needed it. That is what sticks. 5/ Relationships built on honesty outlast everything else. ↘ Markets change, rates change, and carriers come and go. The ones that last are the ones who treated people right when it was hard to. Still learning every day, but those 5 have not changed since the beginning. #broker #workerscomp #insurance

Over the years, I’ve seen #captives move steadily up the agenda for #RiskManagers as economic shifts, geopolitical uncertainty, regulatory change, and a more complex risk environment continue to reshape insurance markets. The 2024 FERMA | Federation of European Risk Management Associations Global Risk Manager Survey reflects this clearly: 📈 interest in creating captives rose from 12% to 17% 📊 use of existing captives remains the second most cited strategy, at 35% The newly published Marsh Risk Captive Solutions 2026 Benchmarking Report brings further perspective to this trend. ☝ What stood out to me most is that the traditional link between hardening markets and captive formation seems to be changing. Even with rates easing across many lines, #115 new captives were formed over the past year. 🔔 To me, that is a strong signal that captives are no longer seen simply as a response to pricing pressure. They are becoming a more mainstream part of the #riskmanagement toolkit helping organisations manage volatility, finance emerging risks, and build longer-term resilience. 🔍 The report also shows: 👉 captives are being used for an increasingly wide range of risks, with #EmployeeBenefits showing double-digit growth 👉 interest in #parametric solutions as part of captive strategies is growing Clearly, #captives are no longer niche. They are becoming a mainstream #strategic #risk #financing tool. Well worth a read. 👇 https://bit.ly/49t1Rac #RiskManagement #Captives #Insurance #RiskFinancing #Resilience