EPISODE · Jun 17, 2026 · 10 MIN
How Holding Companies Use Captive Insurance for Risk Transfer
from The Holding Company with Fexingo: Multi-Business Owners, Portfolio Companies, and Diversified Operators · host Fexingo
In this episode of The Holding Company with Fexingo, Lucas and Luna explore how multi-business owners use captive insurance subsidiaries to self-insure risks, reduce premiums, and improve cash flow. They walk through the mechanics of a captive — a licensed insurance company owned by the parent — and discuss real-world examples like a mid-sized industrial holding company that saved $2.3 million annually by insuring property and liability risks internally. Lucas explains the regulatory requirements, the tax advantages of premium deductibility, and the strategic benefits of accessing reinsurance markets. Luna questions the minimum premium thresholds and risk of adverse selection. The episode also covers fronting arrangements, the 831(b) tax election for small captives, and pitfalls like IRS scrutiny. A pragmatic look at a sophisticated tool that many holding companies quietly use to manage risk and retain underwriting profit. #CaptiveInsurance #RiskManagement #HoldingCompany #BusinessStrategy #Insurance #Finance #TaxStrategy #Reinsurance #SelfInsurance #ParentCompany #Subsidiary #PremiumDeductibility #IRS #831b #Fronting #BusinessPodcast #FexingoBusiness #TheHoldingCompany Keep every episode free: buymeacoffee.com/fexingo
What this episode covers
In this episode of The Holding Company with Fexingo, Lucas and Luna explore how multi-business owners use captive insurance subsidiaries to self-insure risks, reduce premiums, and improve cash flow. They walk through the mechanics of a captive — a licensed insurance company owned by the parent — and discuss real-world examples like a mid-sized industrial holding company that saved $2.3 million annually by insuring property and liability risks internally. Lucas explains the regulatory requirements, the tax advantages of premium deductibility, and the strategic benefits of accessing reinsurance markets. Luna questions the minimum premium thresholds and risk of adverse selection. The episode also covers fronting arrangements, the 831(b) tax election for small captives, and pitfalls like IRS scrutiny. A pragmatic look at a sophisticated tool that many holding companies quietly use to manage risk and retain underwriting profit. #CaptiveInsurance #RiskManagement #HoldingCompany #BusinessStrategy #Insurance #Finance #TaxStrategy #Reinsurance #SelfInsurance #ParentCompany #Subsidiary #PremiumDeductibility #IRS #831b #Fronting #BusinessPodcast #FexingoBusiness #TheHoldingCompany Keep every episode free: buymeacoffee.com/fexingo
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How Holding Companies Use Captive Insurance for Risk Transfer
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