Managing general insurance agency and cybersecurity company Coalition has launched a captive insurer to begin taking risk on its cyber insurance programs.

The captive, domiciled in Hawaii, will provide capacity in addition to its current long-term capacity agreements from carriers including Swiss Re and Arch Insurance.

“With our new captive, we add another layer of security and stability and more closely align our financial incentives with our customers,” said Shawn Ram, head of Insurance at Coalition.

Captives are a type of commercial self-insurance permitted in about 30 states. Once established, they are subject to state regulatory requirements including reporting, capital and reserve requirements.

Dovid Tkatch, Coalition head of Insurance Infrastructure and Actuarial Science, will support development of the captive as well as oversee pricing, reserving, capital requirements and regulatory compliance.

California-based Coalition deploys a technology-driven approach to risk management, which it says has resulted in policyholders experiencing 70 percent fewer cyber claims when compared to other carriers in the market. Coalition serves more than 130,000 customers.

The year has been a productive one for Coalition.

In September, the firm announced it had raised $205 million to accelerate its scale and expand into new insurance lines. The new funding round was co-led by Durable Capital, T. Rowe Price Associates and Whale Rock Capital, with participation from the company’s existing investors, valuing Coalition at more than $3.5 billion.

In October, Coalition acquired Attune, a digital MGA for commercial insurance, which allows Coalition to offer brokers access to businessowners, workers compensation, general liability, professional liability and excess liability insurance, in addition to Coalition’s cyber insurance offering.

In November, Coalition expanded further into management liability with directors & officers and employment practices liability insurance products backed by Zurich North America.

Coalition’s broker platform integrates real-time security, financial, regulatory and transactional data and a allows brokers to generate bindable quotes in just minutes.