The captive discussion is a muted one now, given that the D&O market is generally favorable with abundant capacity. Things are less rosy for certain high-profile segments such as financial institutions with digital assets, generative AI companies, or in some cases industries that ride along with the AI wave (think semiconductors and more recent volatility in that sector). A company’s specific claims history can also factor into renewal results.

If a company wants to self-insure more of the risk, the first move is to migrate to commercially available “Broad Form A-Side only” coverage. These programs don’t protect the company’s balance sheet but do serve as excellent personal protection for individual directors and officers during a catastrophic event. The next transition to a captive can be effective for a small subset of the “A-only” population—that is to say, companies that have an outsized risk profile and are not enjoying the competitive soft market rates, or companies that want more capacity than is reliably available in the commercial marketplace. Standing up a captive solution allows for more control and consistency. Of course, the downside is the infrastructure and capital commitments required to support the captive.