M3 Insurance

Jason Nordby

Jason Nordby is a seasoned insurance professional with more than 30 years of experience. As an expert in the employee benefits captive space, he leads the development and deployment of innovative strategies at M3 Insurance.

In a recent interview with Manage HR, Nordby shared insights on traditional fully insured and individually self-funded insurance challenges, the role of captives, post‑COVID market distortions and the rapid evolution of the captive marketplace.

A Career Built with Vision

Across my 32-year career—including 23 years at M3 Insurance—I have seen how traditional insurance structures often misalign with employers’ strategic and financial goals. The rise of employee benefits captives in the early 2000soffered a transparent, stable and controlled alternative.

By 2012, M3 began developing innovative solutions, drawing me deeper into the captive space. This enabled employers to become more strategic, data-driven and long-term in managing their insurance programs.

As an early adopter, I helped establish best practices, explore new models and create strategic partnerships, leading to my transition from traditional consulting into a leadership role shaping M3’s benefits strategies.

Overcoming Employer Challenges with Captive Solutions

In a fully-insured insurance model, employers benefit from predictable monthly premiums but face annual increases based on projected, unpredictable risk. Limited data access restricts their ability to plan strategically. Insurers price in anticipated risk, even when it doesn’t always materialize, creating a cycle where premiums rise based on past events. The higher premium becomes the permanent baseline for future increases, forcing employers to pay for historical events.

This often pushes employers toward self‑funding, aiming to pay only for actual claims. However, larger claims can introduce volatility, making it difficult for smaller groups to sustain.

Employee benefits captives solve these challenges by allowing employers to self‑fund within a stable, data-rich and collaborative risk environment. Like‑minded employers pool risk to reduce volatility, share best practices and continually improve the performance of the overall risk pool.

"At M3 Insurance, our captive portfolio has averaged a net negative three percent stop-loss renewal over the past five years."

Although initial budgets may resemble traditional models, captives deliver greater long-term savings by removing insurer profit margins. With advanced analytics, captives can pinpoint key cost drivers, project trends and implement targeted interventions.

Hard Market Pressure and the Captive Advantage

The stop‑loss market is currently in a hard cycle, with elevated costs and limited flexibility. COVID‑related suppression of healthcare utilization led insurers to underprice coverage between 2022 and 2025. Meanwhile, healthcare providers raised prices to recover losses, driving a market correction.

Captives insulate against this instability as pricing is driven by captives’ own risk pool instead of the broader market.

At M3 Insurance, our captive portfolio has averaged a net negative three percent stop-loss renewal over the past five years. From a budgetary standpoint, captive groups have significantly outperformed traditional fully insured and self-funded models, with strong and improving results even in a hard market.

Evolution in the Captive Space

Historically, group captives were most common among mid‑market employers with 50–500 employees, transitioning from fully insured plans. Today, larger organizations are increasingly using captives to stabilize stop‑loss costs and align with like-minded organizations.   Over 50percent of the groups we bring into captives are already self-funded. M3 has developed solutions tailored to these larger employers who typically overpay for stop‑loss coverage.

Another emerging trend is the growth of homogeneous captive groups. Traditional captives tended to group employers across industries. Now, organizations in similar industries like ESOPs, senior living, public entities, integrated health systems and rural hospitals are coming together to align their needs and risk profiles through M3’s expertise and guidance.

Guidance for Consultants

Not all captives are alike. Structures, performance and strategic intent vary widely, requiring consultants to understand these nuances and align employers with solutions that fit their goals.

This requires a deep understanding of financial position, workforce dynamics and long‑term objectives. Staying informed on evolving market conditions and emerging captive strategies is critical to delivering sustainable outcomes.