Joshua Kalmikoff has been in specialty insurance for over 15 years. He brings a unique vantage point at the intersection of captives and programs from his experience working in the lenders division for Arch Insurance, where he did captive arrangements in the warranty and service contract space. After his time with a carrier, he developed property and casualty programs at IMA, exposing him to the retail side of the business. Following this, he was recruited by a hybrid fronting carrier to stand up their alternative risk practice for captives, and once they were acquired, he joined Accelerant, bringing a multifaceted, tech-forward vision for captives
Joshua shared more about Accelerant’s new captives offering.
What are captives and how will it support the broader Accelerant ecosystem?
A captive is an insurance company owned by either an insured or a third party that wants to take on risk. After becoming an owner in an insurance company of their own, they start to think about it like we do.
As a risk exchange, Accelerant brings risk capital and specialty underwriters together. Captives enable specialty underwriters and insureds to bring their own risk capital and equip them with access to paper, reinsurance, etc.
Accelerant’s synthetic captive structure emulates the economics of a traditional captive (without the need to incorporate, capitalize, or perform additional due diligence). As a result, our structure is simpler with much faster speed and certainty of execution than traditional forms. This is accomplished via insurance language and contracts with Accelerant Specialty Insurance Company (an AM A- rated insurance company)
What is the origin story? Who at Accelerant is behind this offering?
This is really where Accelerant has an unbeatable culture. At our annual Member event (and the first one I attended), I had a cool brainstorming conversation with Jeff Radke (Accelerant’s CEO) about captives and how I thought we could offer Members something more to help their growth and improve another piece of the insurance value chain. Shortly after, we teamed up with Ian O’Conner, our Executive Vice President—he’s already created two MGAs from scratch, so he’s really great at building things. Together, we operationalized the captive practice across the Accelerant ecosystem.
The energy was real. We had our first two captive deals in a few short months. By Q1 of 2025, we’ll have new entities and capabilities to expand our captives practice.
Our current Members see the opportunity and we’re working closely with them to dive into the applications for their business.
What can captives provide? Why should it matter to Members?
The captives industry is massive—twice the size of the program space and north of $150B. It’s ripe ground for new business activity.
For MGA growth, captives offer a unique opportunity in specialized niches. Today, MGAs may be limited in what coverages they can participate in for their vertical, but eventually their insureds will grow. So captives can widen MGA’s aperture in terms of the size of insureds they can work with and create new programs fueled by captive activities. This means more capability and a wider total addressable market.
For capital providers, a new way to write insurance risks means another way to produce returns.
For insureds: Let’s be honest. Insurance can be expensive with chances or loss minimal. That doesn’t feel like a win. But there’s a way to save. If you’re spending a lot on insurance and you don’t have many losses, you should consider a captive.
How does Accelerant’s approach to captives differ from the rest of the industry?
It’s different in two ways.
First, we offer delegated authority. Much of the traditional market today is composed of full-stack carriers who have broad admitted filings and don’t hand out the pen, so the administrators have implied authority. They do the legwork in identifying insureds, determine what the price needs to be, refer it to an underwriter, rework the quote, etc. There is a lot of friction in this process. Putting the pen as close as possible to the risk is more efficient because those are the people with better intel. Accelerant partners with sophisticated underwriters longing for more flexibility and efficiency to go after a wider swath of risk.
Second, Accelerant has its risk exchange, with capacity, with paper, with numerous entities. It’s not unlike the Apple ecosystem, where the devices can AirDrop to each other and connect seamlessly. As Accelerant’s ecosystem grows, it only creates more value, and we can leverage our partners to create efficiencies within the business. Full stack insurance companies just aren’t incentivized in the same way.
What tools and technologies does the captives service leverage?
We are marrying the captives structure with newer technology—there’s software today that’s capable of moving the needle in captives, but it’s been siloed. At Accelerant, we’re helping different tech speak to each other and implementing policy administration systems to be more efficient, smart, and modern.
What advice do you have for interested Members?
If you’re already a Member, reach out to your Member Director! If you’re interested in becoming a Member, reach out to me or my colleague Aaron DiCaprio.
What’s really refreshing is that Accelerant is made up of a lot of entrepreneurial, spirited individuals who are very accessible and focused on maximizing value for our Members as well as improving the insurance value chain. If you’re interested in learning about captives or have an idea for one, let’s explore what’s possible together.
What success story from the captives pilot can you share?
I’m glad you asked. This makes it all worth it. One of our Members wanted to take risk on their program, and they were working with another fronting company and reinsurance broker to separate their specific risks and aggregate risks between reinsurers. They had multiple levels of intent with varying appetites, lending to complication and confusion.
We saw the value this MGA could have by taking risk, and we brought them a consolidated solution, capacity, and the proper context to take risk.
We like to be fast and wise. Within eight weeks, we got a product in the market. If they kept going down their original road, they’d still be trying to get their business running today. And what’s really great too is that with our Risk Exchange, this MGA can focus on underwriting and not spend the large part of their year marketing to reinsurers.
Could you share a moment of achievement from this past year that was particularly memorable for you and your team?
The implications of captives are very broad, so we were excited to narrow them down to specific use cases and create legal contracts to execute on them. For example, we’ve talked about synthetic captives, which are now a facet of our offering and one solution among many. We’ve designed this practice to have legal contract and policy wording to support new ways for Members to take risk—it’s a massive achievement. And it feels great to be able to add value to our Members and help them grow..
What goals do you and the team have for the next year?
2024 has been a year of testing and validating ideas, building relationships, and getting the right tools in place. 2025 will be our year of building out and executing. Our goal is for captives to become a meaningful contributor to Accelerant next year.
What is your favorite tool or technology you like to use?
I find EVs to be very practical. It saves time going to the gas station and getting oil changes. Between having three children and a full-time job, whatever extra time I have I want to dedicate to my family. I love that every morning, my car is fully charged before I leave the house!