Unveiling the Role of Group Captives Amidst the Hardening Insurance Market for Senior Living and Healthcare Facilities

As we navigate through 2023, the insurance market for senior living and healthcare facilities is beginning to harden. Insurers are grappling with high claims costs, rising regulatory demands, and mounting financial challenges, leading to more restrictive terms and higher premiums. However, amidst these uncertainties, an innovative solution is capturing the attention of business entities — Group Captive Insurance. This article will elucidate why an increasing number of businesses are contemplating the creation of group captives as the landscape of healthcare and senior living insurance grows more rigid.

What are Group Captives?

Group captive insurance refers to an insurance company wholly owned and controlled by its insureds. Every member is an insurer and an insured party, sharing in the collective risk. They offer a unique combination of control, stability, and cost savings, allowing companies to retain and share risks within the captive rather than transferring it to traditional insurance providers.

Hardening Insurance Market: The Push Towards Group Captives

The insurance market for senior living and healthcare facilities is hardening, marked by reduced coverage availability, more stringent underwriting practices, and escalated premium rates. This hardening is driven by a confluence of factors including an aging population, high frequency and severity of claims, regulatory changes, and economic uncertainties accelerated by global events like the Covid-19 pandemic.

As insurers strive to protect their financial health, businesses seeking coverage face a harsher environment, leading them to explore other avenues for risk management. This is where group captives become an attractive proposition.

The Benefits of Group Captives

Risk Control

One of the most compelling benefits of group captives is control. Members of a group captive have direct influence over the company’s operations, underwriting policies, selection of service providers, and investment decisions. This control facilitates risk management and creates an opportunity for members to align their business and risk management strategies effectively.

Cost Efficiency

In a traditional insurance setting, companies are subject to the fluctuations and uncertainties of the market. With group captives, companies can stabilize their insurance costs as they are less impacted by the general market volatility. Moreover, members share administrative costs, leading to substantial savings over time.

Profit Return

Unlike traditional insurance, where underwriting profits go to the insurer, in a group captive, the members share these profits. Therefore, members are incentivized to adopt proactive risk management strategies to reduce claim frequency and severity, subsequently increasing their potential for underwriting profits.

Tailored Coverage

Group captives allow businesses to tailor coverage to suit their specific needs, an option that may not be readily available in the conventional insurance market. This can be particularly valuable in sectors like senior living and healthcare, which have unique and evolving risk profiles.


With the hardening of the insurance market for senior living and healthcare facilities, the business perspective is changing. Group captives are emerging as a viable and advantageous alternative, offering greater control, cost stability, and tailored coverage. As we move forward, it will be interesting to see how this innovative approach redefines risk management and insurance procurement in the healthcare and senior living sectors.

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