Captive Insurance Investment Management
Discretionary investment management for captive insurance companies with portfolios greater than $1 million. Liability-driven construction, domicile-aware compliance, and reporting your auditor and regulator can use.
$1M Portfolio MinimumWho This Is For
Captive insurance companies — single-parent, group, cell, and 831(b) electing structures — with $1 million or more in portfolio assets.
- Business owners whose captive has accumulated surplus with no investment strategy
- Captive boards whose portfolio sits entirely in cash or short Treasuries by default
- Captive managers seeking an investment specialist for their clients
What's Included
- Custom portfolios built to the captive's investment policy statement
- Liability-driven asset/liability matching against expected loss patterns
- Admitted asset and domicile compliance screening
- Liquidity laddering sized to claims timing
- Tax- and fee-efficient implementation
- Real-time reporting formatted for board, auditor, and regulator
Why WealthEQ
- Specialist focus — captives are a stated service line, not an accommodation
- Fee does not grow with investment returns, only with premium additions
- Coordination with your captive manager, actuary, and auditor
- Fiduciary and independent — no proprietary products
Built for the Liability, Not the Benchmark
Custom Portfolios
Designed to meet the unique liabilities of the captive while adhering to investment policy mandates.
Liability-Driven Approach
Portfolio construction matching investment assets with insurance risks of the business.
Tax & Fee Efficient Investing
Portfolios designed to enhance returns after fees and taxes.
Real-Time Reporting
Client portal with access to portfolio data that updates in real time.
Advisor Collaboration
We work with your captive services providers to ensure liquidity and compliance.
Digital Document Vault
Secure document storage for all captive investment-related files.
Why Captive Portfolios Are Different
The portfolio exists to pay claims
A captive's investment portfolio is not a wealth accumulation vehicle. It is the reserve behind a promise to pay. That single fact changes every decision that follows.
An ordinary portfolio can tolerate a drawdown because the owner has time. A captive cannot tolerate a drawdown that coincides with an adverse loss year, because the assets have to be there when the claim arrives. Sequencing risk is not an abstraction here — it is the entire problem.
The default failure mode: all cash
Faced with that constraint, most captives do the safe thing and hold everything in cash or very short Treasuries. It is defensible and it is expensive. A captive that has been accumulating surplus for eight years and earning money-market yields on the entire balance has left a substantial amount of return on the table — return that belongs to the parent and that could have funded additional retained risk.
The correct answer is neither all cash nor a conventional balanced portfolio. It is a structure that segments the assets by the job each tranche has to do.
Segmentation by obligation
Claims liquidity tranche
Sized to expected losses over the near term plus a confidence margin drawn from the actuarial report. Held in instruments that can be liquidated at par on short notice. This tranche is not where return is generated, and it should not be evaluated as though it were.
Reserve matching tranche
Duration-matched to the projected payout pattern of longer-tail liabilities. For a captive writing longer-tail coverages, this is where thoughtful fixed income construction earns its keep — the objective is to have cash arrive when claims do, rather than to outperform an index.
Surplus tranche
Capital genuinely in excess of reserve requirements and regulatory minimums has a longer horizon and can be invested accordingly, within the limits the domicile and the board permit. This is the tranche most captives never identify, and it is usually the largest source of foregone return.
Regulatory and accounting constraints are inputs, not afterthoughts
Domiciles differ in what they will admit as an asset, what concentration limits apply, and what they expect to see in the investment policy statement. Statutory accounting treats unrealized volatility differently than the parent's financial statements do. A portfolio that ignores these realities may look fine in a performance report and still create a surplus adequacy problem at year end.
We screen for admitted asset treatment and concentration limits at construction, not at audit.
Working alongside your existing team
We are the investment specialist. Your captive manager handles formation, governance, and regulatory filings. Your actuary sets the loss picks. Your auditor signs the statements. Our role is to build and manage the portfolio to the policy your board approves, and to give each of those parties reporting they can use without reformatting.
Fee structure
0.70% of starting portfolio value up to $5 million, 0.55% above $5 million, and 0.40% above $10 million, with a $7,000 minimum starting annual fee. The rate is set at the inception of the relationship and does not change; the fee is recalculated for premium additions but not for investment return growth. A $15 million portfolio charged 0.40% that grows 10% and takes a $1 million premium addition is rebilled on $16 million, not $16.5 million — the investment growth is excluded. If the portfolio compounds well, the fee does not follow it upward.
Frequently Asked Questions
Who manages the investment portfolio of a captive insurance company?
Captives typically retain a registered investment advisor with experience in liability-driven investing and insurance regulatory constraints. WealthEQ provides discretionary investment management to captive insurance companies with portfolios greater than $1 million, working alongside the captive manager, actuary, auditor, and domicile regulator.
What makes captive investment management different from ordinary portfolio management?
A captive's portfolio exists to pay claims, not to maximize return. Assets must be matched to the timing and volatility of expected losses, must satisfy the domicile's admitted asset and diversification rules, and must remain liquid enough to meet claims without forced selling. Statutory accounting, surplus adequacy, and regulatory reporting all constrain what the portfolio may hold.
Do you work with 831(b) micro-captives?
Yes. We manage portfolios for both 831(b) electing captives and larger 831(a) structures, and we coordinate with your captive manager and tax counsel on the investment implications of the election.
What is the minimum portfolio size?
$1 million in investable portfolio assets.
Will you work with our existing captive manager and domicile?
Yes. We are the investment specialist, not the captive manager. We coordinate with your existing captive management firm, actuary, auditor, and domicile regulator, and we build the portfolio to the investment policy statement your board approves.
How is the captive fee structured?
0.70% of starting portfolio value up to $5 million, 0.55% above $5 million, and 0.40% above $10 million, with a minimum starting annual fee of $7,000. The rate is set at inception and does not change. Notably, the fee is recalculated for premium additions but not for investment return growth — so a portfolio that compounds does not automatically generate a larger fee.