How Do You Know When Captive Insurance Is Right for Your Organization?

When should an organization seriously consider forming a captive insurance company—and when is it better to wait? In this Captive Insurance 101 episode of The Edge of Risk Podcast by IRMI, Joel Appelbaum speaks with T.J. Scherer, vice president at Spring Consulting Group, about the practical questions organizations should ask before pursuing a captive. The discussion explains what typically prompts companies to explore alternative risk financing, how to distinguish common misconceptions from legitimate opportunities, and why the decision extends far beyond premium size alone. T.J. also walks through the key elements of a captive feasibility evaluation, including total cost of risk, capital requirements, organizational readiness, leadership alignment, and long-term business strategy. Listeners will learn why captives are strategic risk management tools rather than quick cost-saving solutions, how organizations should think about group versus single-parent structures, and what a typical feasibility study can—and cannot—tell decision-makers before moving forward.