What is captive insurance and why do the ultra-wealthy use it?
Most business owners have never heard of captive insurance. That is not an accident. The commercial insurance industry has little incentive to explain a structure that routes premium dollars away from carriers and into an entity the business owner controls. Wesley Sierk spent decades building, operating, and eventually selling a national captive insurance practice, and his core message is blunt: the ultra-wealthy have been using this structure for over 50 years while most entrepreneurs keep overpaying for coverage they barely understand.
A captive insurance company is a licensed insurance entity owned by the insured. Instead of paying premiums to a third-party carrier and watching that money leave forever, the premiums flow into your own captive. If claims are low, the underwriting profit stays with you. The structure is IRS-recognized, it is legal, and it is the same infrastructure Fortune 500 companies have used since the 1960s.
Captive insurance tax strategy: how the deduction works
The tax mechanics are one of the most misunderstood parts of the strategy. At the operating company level, premiums paid to a captive are treated as a business expense, creating a deduction. Inside the captive, those dollars accumulate and can be invested. Over time, a well-run captive builds a reserve that belongs to the owner, not to a commercial carrier. Wes is direct about the implication: "You can make it, but can you keep it?", the title of one of his books, is exactly the question captive insurance is designed to answer.
The structure is not a loophole. It requires real insurable risk, proper actuarial pricing, and regulatory compliance. But for business owners with consistent, quantifiable risk exposure, it converts an expense line into a long-term asset.
Captive insurance for small business: who it actually fits
The common assumption is that captive insurance is only for large corporations. Wes pushes back on that directly. Group captives, in particular, allow smaller businesses to pool together, share risk, and access the same structural advantages that a single large company would use on its own. The key variables are consistency of risk, premium volume, and the owner's willingness to treat the captive as a real business rather than a tax trick.
Wes built his practice serving roughly 800 to 900 companies, not Fortune 500 giants. His clients were operators who wanted to stop bleeding premium dollars and start building something they owned. The structure works when the business owner is willing to think like an insurer, not just an insured.
From a 10-foot fall to a new definition of wealth
Two months after selling his insurance business to Risk Strategies in July 2019, Wes climbed onto the roof of his Palm Desert home in 116-degree heat to fix his own air conditioner. He fell approximately 10 feet, fractured his mastoid bone, and went into a coma. His neurosurgeon told him that 50% of people who fall from their own height and hit their head die. Wes fell nearly twice that distance.
The recovery took months. Screens were banned. Sleep was medically enforced at 18 to 20 hours a day. Black mold discovered in the family home added months to the timeline. COVID arrived and, in his words, gave him the time he needed to actually heal. What came out the other side was a different framework for what wealth means: "At this point, it's not about money. It's got to be about something bigger and greater."
The meta skills that compound everything else
Wes is now at 856 consecutive days of meditation and over 31,000 minutes logged. He describes it as "a meta skill that once you learn it, makes everything else in your life better." The analogy he uses is a freeway: meditation does not stop the cars, it just lets you choose which one to follow. He wishes he had learned it at 20 instead of 50.
Sleep, lifelong learning, and the ability to communicate face to face round out his framework. His 81-year-old father is currently studying for a physics final so he can qualify for an advanced architecture course. Wes cites that as the clearest model he has for what the next 50 years could look like. His AI hedge fund, which has autonomously traded 32 commodities since February 2019 and averaged a 23% return at 4% volatility, is his clearest bet on where wealth creation is heading. "The industrial revolution made the first millionaires, the internet made the first billionaires, and I believe AI will make the first trillionaires."
