Group Captive Insurance Calculator

A group captive is an insurance company owned by the businesses it insures. Members pay premium into a loss fund, and the part of the fund their own claims do not use can come back to them as equity. Enter five years of general liability, workers' compensation and auto premium and claims to see an illustrative Low, Mid and High range of that equity, your five year loss ratio and your maximum assessment exposure. This is a calculator for illustration, not a quote.

How to Use This Calculator

For each of the last five policy years, enter your total general liability, workers' compensation and auto premium.
Enter the total incurred claims for each year, and the largest single claim if any claim was over $100,000.
Select Calculate to see the illustrative Low, Mid and High equity, your five year loss ratio and your maximum assessment exposure.
Use the range as a starting point for a conversation with your broker. A real indication needs full underwriting.

Falcon West group captive

Captive Equity Calculator

Enter five years of general liability, workers’ compensation, and auto premium and claims. This calculator is for illustrative purposes only. It applies a loss fund rate, the group captive’s A Fund / B Fund split, and standard loss development to show an illustrative Low / Mid / High range of equity a group captive might return. It is not a quote, binder, or offer of coverage. A formal indication requires review by the captive’s underwriting and program managers, including loss history, exposures, and group results.

Step 1: Premium and claims by year

Totals for general liability, workers’ compensation and auto. Claims are incurred totals (paid plus reserved) for each policy year.

Policy yearTotal GL, WC, and Auto PremiumTotal incurred claims (paid + reserved)Largest single claim (optional)

2022 to 2023

2023 to 2024

2024 to 2025

2025 to 2026

2026 to 2027

Largest single claim is optional. Typically, a group captive member’s own loss fund pays the first $100,000 of each claim; anything above that is carried by the group’s B Fund and reinsurance, so it is removed from this estimate.

Estimated loss fund rate: 65%
A Fund / B Fund split of the loss fund: 75 / 25

The loss fund is the share of premium reserved to pay expected claims; the rest covers the captive’s operating costs. 75% of the loss fund is your A Fund, which pays the first $100,000 of each claim and is the layer you control. 25% is your B Fund share of the group’s severity layer, shown here before group risk sharing. Underwriting sets the actual rate for each member.

Developed losses in the results can be higher than the claims you entered. Recent years are still maturing, so reported claims are grown by a development factor (1.05, 1.1, 1.2, 1.35, 1.5 from the oldest year to the newest) so they are not understated versus older, more fully developed years. If your A Fund cannot cover a year’s developed losses, the shortfall is an assessment, capped at the A Fund amount.

Step 2: Five year results

Equity is shown as an illustrative range, not a quote. The middle figure is the conservative one to plan around; Low and High bracket it.

Illustrative equity (conservative)

Starting from A Fund remaining after developed losses, capped at about 40% of the loss fund. B Fund is not included. Not a calculated return.

Illustrative equity (low): $0; Floor at about 15% of the loss fund.
Illustrative equity (high): $0; Upper illustration: the lesser of 90% of modeled A+B equity and loss fund minus incurred claims (the figure simple peer calculators often show). Never above that peer style figure.

Illustrative net insurance spend (at Mid)

Premium less the illustrative Mid equity. Lower equity means higher net spend. Not a quote.

At Low equity: $0
At High equity: $0

Total premium

GL, WC, and Auto for the years entered.

Five year loss ratio

Developed losses ÷ premium. Group captives typically look for under 50%.

Equity as % of loss fund

Illustrative Mid figure. Members of mature group captives averaged 23% of loss funds back across 233 closed years (Captive Resources dividend study). That is a historical average, not a guarantee.

Low: 0%
High: 0%

Maximum assessment exposure

Five year A Fund total. Worst case pay in is premium plus this figure.

Policy year	Premium	Loss fund (A / B)	Developed losses	Assessment	Modeled A+B equity	Low	Mid	High	Net spend (Mid)

Illustrative only, not a quote. Modeled A+B equity is the raw engine figure for transparency (A Fund remaining plus full B Fund before group risk sharing). Mid and Low are capped for a conservative public range (Mid at about 40% and Low at about 15% of the loss fund); High discounts positive raw equity to 90% and never exceeds loss fund minus incurred claims, the figure simple peer calculators show. Developed losses are capped at the per occurrence retention when a largest single claim is entered. Actual results depend on underwriting, program terms, group loss experience, investment income, assessments, and how losses develop. A formal captive indication requires extensive underwriting and acceptance by the captive.

How the Estimate Is Calculated

Loss fund: 65% of each year's premium. 75% of the loss fund is your A Fund, which pays the first $100,000 of each claim; the other 25% is your B Fund share of the group's severity layer.
Claims: any part of the largest single claim above $100,000 is taken off, then the rest is grown by a development factor for how far the year has matured: 1.05, 1.10, 1.20, 1.35 and 1.50 from the oldest year to the newest.
Assessment: if developed losses are more than the A Fund, the shortfall is an assessment, never more than the A Fund itself.
Modeled A+B equity: what is left of the A Fund plus the full B Fund.
Mid (conservative): what is left of the A Fund, capped at 40% of the loss fund. Low: the Mid figure, capped at 15% of the loss fund. High: the lesser of 90% of modeled A+B equity and the loss fund less incurred claims.
Net insurance spend: premium less the equity figure. Loss ratio: developed losses divided by premium.

Example: $100,000 of premium and $20,000 of claims in each of five years is $500,000 of premium and $100,000 of claims. At the 65% loss fund rate, the loss fund is $325,000: a $243,750 A Fund (75%) and an $81,250 B Fund (25%). No claim is over $100,000, so nothing is capped, and the claims develop to $124,000, a 24.8% loss ratio. The A Fund less developed losses leaves $119,750, so there is no assessment. The illustrative equity is $48,750 Low, $117,250 Mid and $180,900 High, and the maximum assessment exposure is $243,750.

Frequently Asked Questions

What is a group captive?

A group captive is an insurance company owned by the businesses it insures. Members pool their general liability, workers' compensation and auto risk, share in the underwriting results and can earn back the part of their premium their own claims do not use.

Who is a good fit for a group captive?

Usually a business paying at least $250,000 a year in combined general liability, workers' compensation and auto premium, with a five year loss ratio under about 50% and a commitment to safety and claims management. A loss ratio under 40% is a strong fit.

What are the A Fund and B Fund?

The A Fund is your own layer: it pays the first $100,000 of each of your claims, and what it does not use can come back to you. The B Fund is your share of the group's severity layer, which pays the part of larger claims above that amount across all members.

What is assessment exposure?

If your claims use more than your A Fund, the captive can assess you for the shortfall. The calculator caps that exposure at your five year A Fund total, so your worst case cost is your premium plus that figure.

Is this a quote?

No. The calculator is for illustration only. A formal captive indication requires full underwriting of your operations and loss history and acceptance by the captive.

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Built by Falcon West Insurance Brokers, San Diego, CA Lic# 0616640.