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Captives provide foundation for risk management growth: Experts - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Captives provide foundation for risk management growth: Experts by Gavin Souter From left, Dave Arick of Sedgwick, Erin Sheridan of Johnson & Johnson and Julie Patel of Marsh Risk speak in Orlando. Agents and Brokers , Alternative Risk Transfer/Captives , Risk Management Marsh & McLennan , Sedgwick Feb 5, 2026 ORLANDO, Florida – Mature and new captives can help companies develop risk management programs and improve their insurance purchasing strategies, a panel of experts said. But captives are licensed insurers, so owners should be careful not to expand their use beyond the regulatory scope of insurance, they said. Captives give companies better risk control, greater flexibility and more leverage against the commercial insurance market, said Julie Patel, Houston-based Americas captive consulting leader at Marsh Risk, formerly Marsh. She spoke at the World Captive Forum, sponsored by Business Insurance . “This tool can do a lot more for you than just finance your own risk,” she said. Financial services, health care and manufacturing are the three industries that use captives most frequently and the most common lines covered are property, auto liability, general liability, workers compensation and excess liability, Ms. Patel said. Increasingly, though, captive owners are using them to cover cyber liability, directors and officers liability and other exposures, she said. One of the first things he did when he joined Sedgwick two years ago was to conduct a captive feasibility study, said David Arick, Memphis, Tennessee-based managing director, global risk management at the claims management company. “The first use case really was around our HR folks, who were really concerned about medical plan cost inflation,” he said. Sedgwick examined how to use a captive in a stop-loss program and decided to proceed, funding it conservatively so there was little chance of a loss in the first year, Mr. Arick said. They selected the company’s home state of Tennessee as the domicile, which provided tax and cost advantages, and the captive launched on Jan. 1, 2025. “From an ROI standpoint, it was a very easy conversation with our leadership,” he said. Looking ahead, the company is considering using the captive to increase its workers compensation retention, and to cover international employee benefits, professional liability and cyber risks, Mr. Arick said. “Anytime that there’s an opportunity for us to look at something new with the captive, we’re going to take a hard look at it,” he said. Johnson & Johnson formed its captive in 1970 and it is used to cover a wide range of risks, as an insurer and reinsurer, said Erin Sheridan, New York-based director of corporate risk management. After putting a risk into the captive, the company has never taken it out, she said. “We are constantly looking for opportunities to expand it,” Ms. Sheridan said. Most recently, it placed international employee benefits risks into the captive, she said. It is also considering placing non-product umbrella liability coverage in the captive because of the current difficult commercial excess liability market, Ms. Sheridan said. While captives can be used to address a wide range of risk management problems, company leaders need to be aware of their limitations, she said. “It’s not a piggy bank; it’s not an easy solution to everything; it does require state approval to add something to the captive,” Ms. Sheridan said. 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