From: Business Insurance
Captives are increasingly being used to write third-party business, such as extended warranty programs, generating underwriting profit and strengthening customer relationships, a panel of experts said.
Extended warranties or service contracts are a prime example of third-party business that companies can place in captives because the coverage is closely tied to their customers and products, said Greg Myers, New York-based executive managing director at Brown & Brown Risk Solutions.
He was speaking during a panel session on Tuesday at the Captive Insurance Companies Association 2026 conference.
“Most programs are set up at a 70% or 80% loss ratio, so over time you’re going to get underwriting profits of 20% to 30%,” he said. Because claims may not occur for several years after the contract is sold, companies can also earn investment income on premiums held during that period, Mr. Myers said.
