☰A group captive is an insurance company owned by a group of unrelated businesses that insures its members. Members contribute capital, pay premiums into the shared company, and split the underwriting results. When claims run better than expected, the surplus belongs to the members rather than to a commercial insurer.
Groups can be homogeneous, one industry sharing similar risks, or heterogeneous, a mix of industries diversifying each other. The tradeoffs are real. Members share risk with each other, so underwriting standards and loss control matter, and joining usually means posting collateral and committing for multiple years.
Group captives suit mid-market companies with strong safety records and casualty premiums in the hundreds of thousands, large enough to benefit from keeping underwriting profit but not yet large enough to justify a captive of their own. A feasibility study comparing a group against a single-parent captive is the usual first step.