For many organizations, setting up a captive insurance company to provide coverage for specific risks may be only the first step in a captive’s evolution, experts say.

As time passes, the captive may not be where it was at its beginning, said Anne Marie Towle, senior vice president at Hylant Group, Inc., a major Toledo, Ohio-based insurance broker.

Speaking August 11 as part of a session at the Vermont Captive Insurance Association (VCIA) 2020 Virtual Conference, Ms. Towle noted there can, for example, be significant changes in the commercial market in the time since a parent company’s captive insurer started providing coverage.

“There can be business plan changes and market plan changes. You may not be where you were at the beginning,” Ms. Towle said.

At the same time, as top corporate executives become more educated about captive insurance, they may become more open to their companies’ captives expanding coverages.

“You may have had individuals in the organization that were risk averse,” Ms. Towle said. But over time, that is likely to change as corporate executives become more knowledgeable about captives, she said.

Turning to another issue, Ms. Towle said there are numerous factors captive parents need to consider when they are deciding whether or not to expand the coverages offered by their captives.

For example, “What type of surplus have you built up from inception,” and does it allow you the ability to expand? Ms. Towle said.