CAPTIVE
Your own risks, in your own insurer.
A captive is an insurer that a corporate group sets up to underwrite its own risks. As an insurance broker, we arrange fronting, broker the reinsurance into the captive, and place the retrocession as needed, while formation and management are supported together with specialist captive consultants. One point of contact from feasibility to ongoing operation.
BEYOND CONSULTING
Beyond consulting: we place the insurance and reinsurance ourselves
A captive's economics depend on the terms of the fronting on the way in and the retrocession on the way out. Negotiating those terms is the broker's job.
Negotiating fronting terms
We select the fronting insurer or kyosai and negotiate the fronting fee and collateral requirements.
Designing retention and retrocession
We design how much the captive retains and what it cedes onward, and approach reinsurance markets in Japan and overseas directly.
Annual renewal negotiations
Every year we renegotiate fronting and retrocession terms in light of loss experience and market conditions.
Underwriting experience
Team members who have worked in underwriting and reinsurance at credit and non-life insurers shape the terms around what insurers and reinsurers look for.
WHO IT SUITS
Who a Captive Suits
With a large premium base, a company may set up its own captive; with a smaller one, renting a captive or a cell run by others is an option. Because formation and management are supported with specialist firms, a captive can be considered without an in-house insurance team.
WHAT TO EXPECT
What a Captive Can Offer
Keeping part of the premium within the group, so that the profit in loss-free years stays with you
Cover for risks such as earthquake or cyber that the conventional market finds hard to write
Less volatile insurance costs through direct access to the reinsurance market (an expected effect)
Better risk management from building up group-wide risk data
FEASIBILITY
Testing Whether a Captive Is Feasible
A captive is worth setting up only if it beats your existing insurance. Before any decision, we test it from three angles.
Retention and transfer
Using past losses, the probable maximum loss (PML) and loss frequency, we consider how much the captive should retain and how much to transfer to the reinsurance market.
Whether fronting and retrocession can be placed
We check the fronting insurer's underwriting appetite, the terms of cession to the captive, the fronting fee and collateral requirements, and test whether retrocession can be placed in overseas reinsurance markets.
Economics and capital
We model formation and running costs, required capital, reinsurance premium and the losses the captive would bear under several loss scenarios.
The feasibility study is carried out with specialist captive consultants. We are responsible for placing the insurance and reinsurance and negotiating terms.
SERVICES
Our Services
01
Feasibility study
Selecting the risks, estimating premium volume and economics, comparing a standalone captive with a cell (PCC), and comparing domiciles such as Labuan (Malaysia) and Hawaii.
02
Formation support
With our partner captive consultants: coordinating with the local captive manager, law firm and regulator, and preparing the business plan.
03
Placing insurance and reinsurance
Whatever is needed among selecting the fronting insurer, cession to the captive, and brokering retrocession above the captive's retention.
04
Ongoing support
Annual renewals, managing premium and claims flows, and reviewing underwriting terms.
KYOSAI AS FRONTING
Using a kyosai as the fronting carrier
Fronting is not only a role for non-life insurers. We have brokered cessions in a scheme where a kyosai writes the primary cover with a captive behind it. Whether a kyosai can act as the primary carrier, however, depends on the law governing its business, the scope of its members and the risks covered, and how reinsurance (re-kyosai) is handled, so it is not a structure every company can use. We work through your situation with you, starting from whether an insurer or a kyosai should front.
RISKS COVERED
Examples of Risks Covered
Trade credit
Cargo and logistics
Product warranty and guarantees
Property and business interruption
Employee benefits
In Japan, a working group of the Financial Services Agency on the insurance system is considering a domestic reinsurance captive regime (as of 2026).
FAQ
Frequently Asked Questions
How much premium is needed?
We use annual premium of around JPY 50 million as a guide for starting to look at a captive. It is not an objective minimum: the economics depend on the risks, loss history, required capital, fronting and retrocession terms, domicile, and whether it is standalone or a cell. For smaller programs we consider a cell. We can model the economics in a quick assessment.
What are the tax points for an overseas captive?
When a Japanese company sets up a captive overseas, the application of Japan's controlled foreign company (CFC) rules and similar regimes must be considered. Tax judgments are confirmed with tax professionals.
What do the consultants and Credit Hills each do?
Our partner captive consultants handle formation and management; we, as the insurance broker, arrange the fronting, reinsurance and retrocession needed. You have one point of contact.
We offer a quick captive assessment. Tell us your annual premium volume and the risks you have in mind.
Contact us