Captive Insurance Services Ltd.

What is Captive Insurance?

Captive Insurance is a form of regulated self-insurance whereby you retain the underwriting profits as opposed to losing them to your current insurer.

About Captives

A Captive is

  • ​an insurance company,
  • supervised by the insurance regulator,
  • set-up by its owners,
  • to insure its own specific risks,
  • with direct access to the reinsurance market and
  • enjoying its own investments.

The Captive can assume the risks directly from the insured subsidiaries where local legislation permits or assume the risks indirectly through reinsurance from local insurers insuring the owner’s business.

The benefits of such an arrangement include:

  • Ability to centrally retain risks, and generate underwriting profits
  • Decrease dependence from insurance companies,
  • Generate income,
  • Streamline the risk management,
  • Achieve a lower overall cost of risk.

Captive Market

Globally, there are over 6,000 Captive insurers. Over two thirds of the global 1,500 companies own at least one Captive insurance company.

The main lines of business underwritten by Captive insurers are Property and Liability. However, other lines are also very common, depending on the business of the owner. Lines include Marine (Cargo and Hull), Credit, CAR, Professional Indemnity, Motor, Warranty, Employee benefits, environmental risks, product liability and more.

There are over 50 Captive domiciles in the world. The ideal domicile depends on the jurisdiction of the owner, the risk underwritten, Capital available and the location of the insured risks.

Why use a Captive?

Sophisticated organisations are continuously looking to develop successful risk financing strategies, and many utilise a Captive to achieve this goal.

To be (or not to be) a Captive owner

Every organisation has its own specific approach to assuming risk, but often those companies that want to maintain a large degree of control with regard to their group risk and insurance spend seek to form a Captive. The most successful captives are those where the parent views the captive as a long term strategy. This has been borne out by those companies who have operated captives for a number of years.

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