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Healthcare Insurance/Reinsurance Captive Landscape

February 2026

Authors

Risk & Regulatory Consulting, LLC:
Veronika Cooper, FSA, MAAA
Lynn Manchester, FSA, MAAA
Rebecca Sheppard, FSA, MAAA
Dave Heppen, FCAS, MAAA

Executive Summary

Captive insurance companies—entities formed and owned by organizations to insure their own risks—are playing an increasingly strategic role in the healthcare sector. As healthcare costs continue to rise and traditional insurance markets become more volatile and expensive, captives can be a compelling alternative for employers, healthcare providers, and insurers seeking greater control, cost savings, and risk management flexibility. This report explores the evolving landscape of healthcare insurance and reinsurance captives. It provides a comprehensive overview of the history, structures, market dynamics, and regulatory considerations shaping this space.

Below are just a few examples from organizations where companies included a captive in order to achieve their business objectives, which include, but are not limited to, gaining better control over insurance programs, mitigating current risk, and addressing emerging risk (Kagan, Julia, 2024; Capterra, 2025; Muselman, 2024; Unity Captive, 2024):

  1. An insurance agency: This insurance agency transitioned from a fully insured plan for its employees to a self-funded group captive model and reports recognizing significant cost savings, as well as improved employee satisfaction. They also serve as a resource for other businesses looking to implement this strategy (Roundstone, 2024).
  2. Totem: This benefits consulting company switched to a self-funded group captive model and achieved zero deductibles and reduced copays for its employees, while also seeing a 12% return on unused premiums in the first year (Totem, 2024).
  3. A home healthcare agency: While not a healthcare provider, by leveraging a healthcare-related captive program, this agency increased deductibles on its traditional insurance, lowering premium costs, and then used the captive to insure those higher deductible levels. This approach also allowed for broader coverage of specific risks within the home healthcare sector, such as cyber liability, crime, and employment practices liability, while capturing profits within the captive. Below is a breakdown of how home healthcare agencies are leveraging captive insurance (My Benefit Advisor, 2024):
    1. Cost control and savings: Captives allow home healthcare agencies to retain a portion of their risk. By effectively managing risks and claims, agencies can generate underwriting profits within the captive, leading to further savings and a reduction in premiums.
    2. Risk management and control: Participating in a captive can enhance focus on proactive risk management, where agencies are motivated to implement and improve safety and quality measures, which leads to better outcomes for patients and can lead to fewer claims. Captives also give agencies more autonomy when it comes to benefit design, claims processes, and handling of emerging risks that may not otherwise be covered by traditional insurers.

Key findings include:

  • Rapid growth and diversification: As of 2024, over 8,000 captives across all sectors of insurance, globally wrote approximately $50 billion in premiums. Healthcare captives—especially group medical captives and single-parent captives—are among the fastest-growing segments.
  • Market drivers: Economic pressures, dissatisfaction with traditional health plans, and rising demand for benefit customization are fueling the shift toward captives. Employers are increasingly turning to captives to manage medical stop-loss coverage and other employee benefit risks, such as benefit design and accountability risk, rising costs, administrative complexities, and potential legal and compliance issues.
  • Captive types: The report outlines various captive types, including pure (single-parent), group, rent-a-captive, protected cell, and HMO captives. Each offers different levels of ownership, risk sharing, and operational complexity. Business entities are able to select a captive type that best fits their needs, which has been one of the main drivers in the expansion of healthcare captives.
  • Advantages: Captives can reduce insurance costs, improve access to reinsurance markets, offer tailored coverage, and return underwriting profits to owners. They can also provide valuable data transparency and risk management tools.
  • Challenges: Forming and managing a captive involves significant upfront costs, regulatory compliance, and exposure to underwriting risk. Domicile selection and feasibility studies are critical to success.

Material

Healthcare Insurance/Reinsurance Captive Landscape

Suggested Citation

Cooper, Veronika, Manchester, Lynn, Sheppard, Rebecca, and Heppen, Dave. Healthcare Insurance/ Reinsurance Captive Landscape. Society of Actuaries Research Institute, February 2026. https://www.soa.org/resources/research-reports/2026/healthcare-captive-reinsurance-landscape/

Acknowledgements

The authors’ deepest gratitude goes to those without whose efforts this project could not have come to fruition: the volunteers who generously shared their wisdom, insights, advice, guidance, and arm’s-length review of this study prior to publication. Any opinions expressed may not reflect their opinions nor those of their employers. Any errors belong to the authors alone.

Project Oversight Group beneficiaries:
Rob Bachler, FSA, FCAS, MAAA, Project Oversight Group Chair
Stephen Caulk, FSA, MAAA
Lina Chan, FSA, MAAA 
Dan Mulhern, FSA, MAAA
Brian Pauley, FSA, MAAA
Matthew Trott, ASA, MAAA
Greg Warren, FSA, FCA, MAAA

At the Society of Actuaries Research Institute:
Achilles Natsis, FSA, MAAA, FHLI, Health Research Actuary
Barbara Scott, Senior Research Administrator

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