Captive Insurance Management
Every year your premiums climb. Most years you barely claim — yet none of that money ever comes back. A captive insurance company you own changes that: the premiums you would send to an outside carrier stay in an entity you control, financing your own risk.
The problem
If your business runs clean, conventional insurance can feel like a one-way door.
You pay rising premiums to hand your risk to a carrier. In a good year — few claims, careful operations — that carrier keeps the difference, and you start over at renewal. Meanwhile, the exposures that matter most to your business are often the ones standard policies exclude, sub-limit, or price out of reach.
So you carry them anyway — informally. You self-insure real risk with no reserve set aside, no formal structure, and no plan for the year a loss actually lands. There is a more deliberate way to hold the risk you are already holding.
The concept
A captive is a licensed insurance company formed to insure the risks of its owner. Instead of sending premiums to an outside carrier, your business pays them to a captive you control. To be insurance, the captive takes on genuine risk — it shifts risk away from your operating company and distributes it across a pool of exposures. In a year with few losses, the underwriting profit a commercial carrier would have pocketed stays inside an entity you own.
It is insurance first: real coverage, real risk transfer, governed and reserved like any other carrier.
What is a captiveHow we help
Most clients arrive needing one of two structures. The right fit depends on whether you are insuring one company or sharing risk across several.
For a single company
For one business with real, insurable risk and a strong loss history. You form and own a captive that insures the exposures your commercial policies exclude or overprice — and, where it qualifies, makes the §831(b) tax election available. Insurance first; the election only ever follows genuine coverage.
Explore this pathFor a group of companies
For established businesses that want the advantages of ownership but prefer to share risk. You join other financially sound companies in a captive you co-own, pooling and distributing risk across the membership — with underwriting discipline that rewards strong loss experience.
Explore this pathWhy a captive
The reasons to own a captive are insurance reasons first. Tax efficiency is real, but it is the last item on this list for a reason.
Insure the enterprise risks standard carriers exclude, sub-limit, or price out of reach — supply-chain interruption, reputational harm, deductible reimbursement, and more. A captive lets you formalize the exposures you are already carrying without structure.
When you own the insurer, favorable loss years build value inside an entity you control instead of padding an outside carrier’s margin. Managed well over time, a captive can become a genuine balance-sheet asset rather than a sunk cost.
A captive is its own licensed, regulated company. The reserves it holds to pay future claims sit there — distinct from your operating business — adding a layer of structure and discipline to how you fund risk.
Insurance companies are taxed under their own rules. A qualifying small captive may elect under §831(b) to be taxed only on its investment income — currently available where annual net written premiums do not exceed $2.9 million for the 2026 tax year (IRS Rev. Proc. 2025-32, indexed annually). Any tax treatment depends entirely on your facts and proper structure; it is a consequence of doing insurance correctly, never the reason to form a captive.
This is general information, not tax advice. See our disclosures.
Your captive manager
Tessera is led by Nate Jones, CPCU, ARM — a captive insurance professional with more than 15 years of experience as a former underwriter and captive manager. Your captive is shaped by someone who has priced risk, run captives day to day, and seen first-hand what separates a structure that endures from one that draws scrutiny.
Advice comes first. Tessera helps you decide whether a captive is right for you before ever managing one — and will tell you plainly when it is not.
About TesseraHow it works
Before anyone forms anything, we answer the only question that matters: is a captive right for your business, and what would it actually return? The feasibility study is that answer, in writing.
We review your risk profile, loss history, and goals to test whether a captive makes sense for you — and tell you honestly if it does not.
If it fits, we model the right structure, domicile, and funding, and project the economics — so you can weigh the decision on your own numbers rather than a brochure.
You decide with full information. If you move forward, Tessera handles formation, licensing, and ongoing management — the captive-manager role, done properly.
Done the right way
Captive insurance is a long-established, legitimate way for businesses to finance risk — but only when it is done as real insurance. Tessera structures every captive around genuine risk transfer and real risk distribution, with the documentation and governance to stand up to a skeptical examiner. We treat compliance as the foundation, not an afterthought.
The arrangements that get businesses into trouble are the ones built backward — chasing a tax outcome instead of insuring real risk. We don’t build those.
How we approach complianceFeasibility Study
Start with a feasibility study. We’ll tell you whether a captive is right for you — and what it could mean for your business.