Overview of Captives
A captive is an insurance company that insures the risks of its owner, affiliated businesses, or a group of companies. A Single Parent Captive is owned and controlled by one company and insures that company and/or its subsidiaries while a Group Captive is an insurance company owned and controlled by two or more non-affiliated organizations insured by the captive.
Advantages of Forming a Captive:
- Reduced dependence on commercial insurance markets
- Retain underwriting profit and investment income
- Reduce risk management costs
- Stabilize commercial insurance pricing
- Increased availability of insurance coverages
- Direct access to reinsurance markets
- Increased control over services (claims handling, underwriting and loss control)
- Regulatory and tax efficiencies