DICEUS CEO Illia Pinchuk on the Insurtech Leadership Podcast

Recently, Illia Pinchuk, CEO and founder of DICEUS, joined Joshua R. Hollander for a new episode of the Insurtech Leadership Podcast. The conversation was about a problem familiar to anyone running a captive or captive management firm: growth that depends on adding people, not improving systems.

Where spreadsheets stop scaling

Illia Pinchuk walks through why captive managers relying on spreadsheets eventually hit a ceiling. Every new policy, renewal, and regulatory filing adds manual work. Growth stops being a matter of strategy and becomes a matter of headcount.

Where value leaks out

The episode also covers the less visible cost of manual captive management – the value that disappears in disconnected systems, delayed reporting, and processes that depend on one person remembering how things work.

Pricing built around captive needs

A central part of the discussion is feature-based pricing, and why it matters in a segment where cost efficiency is the entire reason a captive exists in the first place.

The full conversation is available now on YouTube:

Read the transcript below.

Joshua: I’m pleased today, on this episode of the Insure Leadership Podcast, to be joined by Illia Pinchuk. He is the CEO and founder of DICEUS. Welcome, Illia.

Illia: Hello, Joshua. Thank you for inviting me.

Joshua: Absolutely. As I understand it, DICEUS builds ready-made and custom software for insurers, brokers, and the captive insurance market, including a captive management platform and an owner portal that pull policy, claims, reinsurance, and compliance into one system. This is an interesting conversation right now, because captive premiums have reached close to $80 billion globally, and the segment keeps growing. Yet a lot of captive owners and managers still run critical operations on spreadsheets and disconnected reports. So we’ll get into that, learn a bit more about Illia’s leadership journey, and talk about where we are in insurance, insurance technology, and insurtech today. So welcome again, Illia.

Illia: Thank you again for having me today, Joshua. Let me quickly introduce myself. I have been running this company for the last 14 years, and from day one we provided professional services for insurance organizations: primarily insurance companies, large insurance brokers, MGAs, and third-party administrators.

Later, since we had a lot of experience in professional services, I decided it was time for us to start building our own solutions, and to help insurance organizations not only from the services perspective but also by providing them with our ready-made solutions. We built 22 different products across different business lines and departments. We automate a lot of different functionality and business processes inside different organizations.

And indeed, the captive market is one of our best segments at the moment. All our solutions work in different segments, but the captive market is one of the main streams in our company. I’ll be happy to talk about this topic more, because I see real growth here.

Joshua: Sure. Maybe you can elaborate on the core problem you’re seeing from an operations point of view in the captive market.

Illia: First of all, I must say this is quite a young market in terms of business processes and digital solutions. In general, it’s a young market, so there are still not that many players in that field, but I see it growing quite fast. From what I know, there are about 7,000 captives registered worldwide. Obviously, about half of them are in the United States. Then we have good domiciles such as Bermuda and the Cayman Islands, and hopefully a lot more coming in the UK market.

As for the key problems we are trying to help them solve, we should first differentiate within the captive market in general. There are a lot of captive managers who help captive owners manage daily operations. Then we have self-managed captives, organizations that manage their captives on their own. And we also have group captives, which can be self-managed but can also be managed by captive managers. Of course, there’s more than that: we also have risk retention groups and a few other self-insured organizations, but I won’t touch on those topics today, because we work across all of them.

Captive managers have one set of issues. Self-managed captives have slightly different issues and challenges they want to solve.

So what kind of challenges do captive managers have? Obviously, the volume of captives they manage. Their problems start all the way from policy issuance, and then they have a lot of issues with managing all these financial spreadsheets. There’s a lot of complex business logic, like A/B funding. When captive managers or captives want A/B funds, they normally keep the initial premium in the A fund, and the B fund is another reinsurance layer, especially in group captives. All of this has to be connected to the general ledger and the policy administration system. And here we have a lot of mess, because they need to work with different parts of the business, and it’s very difficult for them to manage this in spreadsheets.

And with every captive they get as new business, for example, another captive owner who wants to create a captive, they help form the captive, then they need to manage it, and then they need an additional consultant to help manage it. The number of business consultants they need is roughly proportional to the number of captives they onboard. That means they cannot grow without adding new people. It becomes more of a people business than a service business: they can grow only if they onboard new people. And that’s probably a big challenge for them, because if they want more business, they need more people, the number of people is limited, and they cannot grow as fast as they want. We are helping them tackle those challenges.

Self-managed captives have a somewhat different issue. They don’t need a traditional policy administration system, because they normally issue one, two, or maybe five or 10 policies a year. In most cases, it’s actually only one policy. So they don’t need a policy administration system, but they do have claims, and we help them with that: we provide them with a claims management system. They might also need a general ledger, and they want it all in one system. They don’t want to buy expensive systems from different providers and connect them to each other. They would rather prefer a niche player like us, because they want an all-in-one system, and that is much cheaper for them.

Of course, they fight for cost, because the whole idea behind captives and captive management is about cost, right? Otherwise, you can just go to a traditional insurance company and buy coverage. That’s why our systems help reduce operational overhead, lower the cost of maintaining daily operations, and make this business more reasonable, efficient, and profitable for all of us.

Joshua: It sounds like it’s different depending on whether it’s a captive management organization, a group captive, or a self-managed captive. But where do you typically see the most value leakage in a captive that’s being run manually? Is it claims, like you just referred to at the end there? Is it reserving? Is it reinsurance reconciliation? Is it the regulatory piece? Where are the places where value is lost the most?

Illia: If we’re talking about captive managers, they have more challenges than self-managed captives. Captive managers sometimes work with captive owners and manage their captives on their behalf. But there is also another way they operate: they create a sponsored captive, which is like a group captive, and create a cell structure in it. They own the captive and rent out cells inside it to midsize businesses, I must say, because larger businesses can afford to create and own their own captives.

In this case, they need to manage all the daily routine, starting all the way from managing the prospect and creating this structure in the system to keep all the data. Sometimes they also issue policies, but not always, because in many cases the policy will be issued by the fronting carrier. In some cases, the captive manager might issue a policy, and the same goes for endorsements.

But then they have a big gap in managing premium. If it’s a group captive with a more complex structure, they need the kind of module we have, which is premium allocation. They need a system that will allocate premium properly to the A fund and the B fund, based on business rules. Of course, they also need a reconciliation module and a general ledger, because they need to reflect everything in the financial system.

Then there is another side of it. In most cases, they don’t manage claims, though we have clients who do. If they don’t, they work with third-party administrators, and there might be a lot of them. If you have 50 captives, you might have 10 or 20 different TPAs. Everyone has their own system, and they just provide loss run reports, and you have to be able to upload them into the system. If you don’t have a system and have only spreadsheets, then at the end of the month you’re getting 20 completely different spreadsheets, and you somehow have to make magic work to calculate the loss ratio and enter it into your general ledger. That’s a big issue.

We have a loss run processing module inside our system that lets you upload these reports regardless of the template, store them in the system, and reflect them in our general ledger. So they don’t have this headache at the end of the month. We configure the template structure for them at the beginning of the implementation, or whenever they get a new TPA, and they just upload the file, and that’s it. No headache.

You also touched on compliance. Yes, exactly: they need to create a board pack at the end of the period, and they need to get that data from the system. That also takes a lot of time.

There is also a very crucial component, which is investment functionality. They normally work with investment funds to manage reserves, using instruments like ETFs, government bonds, and so on, to work with inflation. They need to upload this data into the system and reconcile it on a monthly basis, or whatever schedule they have. And there might be not only one fund management company, but several, and they might provide this data in different formats and templates, and it all has to be uploaded into the system somehow.

So we should think of a captive manager as an organization that can manage tens, sometimes hundreds, of insurance companies. Their challenge is not the same as that of a large traditional insurance company, but it’s different, and in some ways it might be even more difficult. And we are helping them with this.

Joshua: Is your platform set up as a series of modules that are different point solutions, or is it an integrated platform? How does it work, since you’re talking about different use cases here?

Illia: We have a complete platform, but the idea is in how we work with our clients. From day one, we try to understand what they need and where their biggest pain points are, and then we configure the system based on their requirements. The granularity of our system is not even module-based; it’s feature-based. We charge based on the number of features a client uses, which makes it even more attractive for them.

So it’s not that they buy, for example, a general ledger or claims management from us. They can explain specifically what they really need inside a module. Take billing: maybe they don’t need reconciliation, collections, and invoicing, and they say, “we just need invoicing from the billing module, and that’s it.” Then we charge them only for the functionality they use. We are quite efficient in that regard, and it’s one of our differentiators. And I think a similar model will come to the red ocean of policy administration systems for traditional insurance companies and MGAs. They might need to change their pricing one day.

Joshua: I know we’ve talked about different business models, different use cases, et cetera. But how are you typically measuring whether the platform is working?

Illia: In what sense?

Joshua: Like time saved, errors caught, faster processing, et cetera.

Illia: From the business perspective?

Joshua: Correct.

Illia: For example, take policy issuing. Say a client needs to issue 400 policies a year, they spend half a day or a day on each policy, and they have a dedicated person for this job. With our system, they can do it within literally a week or a week and a half. Obviously, that’s a significant cost reduction.

But from our latest conversations with clients, we realized how they look at our platform. They say: if your system can save us the work of one or one and a half business analysts or captive manager consultants, then it makes sense for us. And they do believe it, and they see those results. Our system can save a traditional captive management organization at least one or one and a half consultants, but in reality I think it’s even more, because they really don’t need to do a lot of the manual work they do today.

There’s another way the system is useful. If you’re in spreadsheets, you’re tied to specific personalities. If one of the employees leaves the company, it’s a huge issue, because finding information in one Excel spreadsheet or another is quite challenging, isn’t it? But if you have everything in a system, and the system, like ours, is self-explanatory, it’s different. We recently added a lot of onboarding functionality, a lot of training, and a lot of AI components that help explain how to use the system, and we have our support. So they can literally onboard a new person in one or two weeks, and that person will start performing like the one who left the company. That’s another value we see for captive managers and captive owners.

Other than that, I forgot to mention another one of our systems. It’s an additional component, but we position it as a completely separate product: the captive owner portal. What does it mean? Any captive manager can give their captive owners their own portal, where they can see transparently how the captive operates and interact with the captive manager not only via email but also through the system. They can see whether the captive is solvent, request any type of endorsement, see reserves, see the loss ratio, see invoices, including outstanding invoices. They can literally see everything that is going on in the system. It’s an additional positive side effect of having the core system and then implementing this portal on top of it.

Joshua: As I understand it, you’ve got some AI handling different competencies within the platform, in particular around unstructured data. If someone has years of spreadsheet data, and maybe some of that data isn’t totally clean, how do you handle onboarding a client like that and actually take full advantage of the AI built into the platform?

Illia: This is where we are the experts, because for the first seven or eight years we were doing this job as professional services work. Most of our requests were related to cleaning and structuring data in one way or another. So I must say we are experts in the data field.

First, we analyze the data, clean it, structure it, and then upload it into the system. We do the full extract, transform, and load process on our side. Our business analysts work closely with clients to understand the data, find what data is missing, whether there are any duplicate records, and how all those spreadsheets relate to each other. We do this analytics work on our side. It’s not that we leave the client with all the data and say, “well, you can upload it into the system.” It’s not like that. We do it for them. That’s also one of our differentiators: we upload all the data, and we work in a messy environment and understand what is going on inside it, because we’re used to it. It was our bread and butter in the past.

Joshua: Got it. And what have been the challenges of building a business like this, one that operates across multiple markets globally? And has your approach to growth changed over time as you’re trying to scale?

Illia: You mean challenges for us?

Joshua: Yes. You’ve obviously got different regulatory environments: in the US, state to state, and certain places where captives have had more traction. You mentioned Bermuda, you mentioned the UK, and so on. And I think you have staff in different locations as well. So, managing all that in a smaller growth organization.

Illia: The biggest challenge is that, although we have been working in this market for some time already, we still see new cases where our system can be even more flexible. We saw a certain barrier to entering this market at the beginning, and even now that we’re in it, we still see more and more new use cases. Because, again, this market is quite young, and a lot of things are still not standardized, which means they can change over time.

That’s why we work quite hard from the software product management perspective to make this product as flexible as possible, so that our clients can use low-code tools inside the platform to configure the system on their own, without coming back to us. I think that’s still one of the biggest challenges, and I must say we are successful at it, because we put an enormous amount of hours and thinking into how it should work, and we are getting there.

Joshua: Got it. And are there certain things you decide to standardize centrally, and certain things by local market? How do you think about that?

Illia: From what I see, the US market is the most developed in that regard, because the whole idea of alternative risk transfer came from the United States, right? There are captives all over the world, but in many domiciles, for example in Europe, they still don’t have cell structures implemented as such. Captives there are still a more rigid structure. In that sense, other markets are much easier for us than the United States, and since we are working in the United States, adapting our solution to other markets is much easier.

So I can’t say the solution is different from one market to another. Obviously, there are some particularities. For example, in the United States it’s the GAAP financial standard, and in Europe it’s IFRS, so we have to support different financial standards. But I think that’s common for any general ledger, so in that regard I can’t say it’s that much different. From the regulatory side, obviously, we can configure different board packs according to the domicile. We still don’t cover all the world’s domiciles, so whenever we get a new client, we configure the system based on their requirements and specifics.

Joshua: Got it. Is there anything you see coming in the captive market? And do you see the adoption of platforms like yours as closing the gap between captives, or potentially expanding it, enabling more sophisticated organizations to get a leading edge over others that don’t adopt the technology?

Illia: That’s a very good question, and I have been thinking about it for a while. I see a lot of changes nowadays, especially with the UK market and the potential new domicile regime from 2027, which might also change a lot of things. We still don’t know all the details, but something is happening there too. That’s from the business perspective.

When it comes to technology, where we are the experts, I see one good use case where we can help captive managers, and potentially, in the future, captive owners could follow. Speaking specifically about captive managers: starting to work with a captive manager and renting a cell inside a group captive takes time. Even if I create my own captive and give it to a captive manager to manage, it takes time for us to start collaborating.

So my dream, or ultimate goal, is to help captive managers start collaborating with clients by literally pressing a few buttons. It should be fully digital. The client should go through a digital onboarding step, just filling in all the details, and everything should happen automatically. It’s like opening a bank account: nowadays you don’t need to go to the bank, you can do it remotely. Potentially, it can be done similarly in this field. And I think that will be a big game changer.

Joshua: Well, I appreciate having you on today. Is there anything else we haven’t covered that you’d like to touch on before we wrap?

Illia: No. Thank you very much, Joshua, for having me today. If anyone from your audience is interested in such solutions, I’ll be happy to chat with them.

Joshua: We’ll have your contact info and the company info in the show notes. Really appreciate having you on. Illia Pinchuk, CEO and founder of DICEUS. Thanks again.

Illia: Thank you.