Are real estate captives common in Utah?
Around sixty identified real estate captives, and property coverage almost everywhere else
Travis Wegkamp counted before answering. Utah has identified roughly sixty active captives as real estate related, and the majority of those are property management companies covering tenant liability rather than owners insuring buildings. The bigger movement he describes is not in real estate captives at all: during COVID era property renewals, companies with no real estate connection but with property on their books began placing property coverage into captives they already had, and Utah's written premium grew sharply as a result.
The number is worth taking at face value because of who is giving it. Wegkamp says he took a quick look and identified around sixty active captives as real estate related, which is a count from the division's own book rather than an industry estimate.
The composition is the more interesting half. The majority are property management companies, and what they are covering is tenant liability. That is a liability play rather than a building play, which matches where the habitational market has been hardest.
Key takeaways
Utah has identified roughly sixty active captives as real estate related, and Wegkamp says most of them are property management companies covering tenant liability.
During COVID era property renewals, companies outside real estate that owned property began placing property coverage into captives they already had.
Wegkamp says a majority of Utah captives now write some sort of property coverage, even though he would not call real estate one of the division's larger business types.
The larger shift he describes happened outside the real estate sector. During COVID, when property renewals were, in his word, crazy, companies that were not real estate businesses but owned property started moving property coverage into captives they already had.
That is the pattern worth noticing if you own real estate. The captive did not have to be built for property. It was built for something else, and property coverage moved into it when the commercial market made that the better option.
From the conversation
Travis Wegkamp
Director, Captive Insurance Division, Utah Insurance Department
“went from about 2 billion in gross premiums in Utah captives to over four”
This answer begins at 36:41 of the full conversation. Watch or listen to the whole thing.
Citations
Sources
- Captive, Utah Insurance Departmenthttps://insurance.utah.gov/captive
The views expressed are those of the featured guest, drawn from a recorded conversation, and reflect their own professional experience. Nothing on this page is insurance, tax, legal, or investment advice. Consult your own advisors about your specific situation.
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