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- A "captive insurer" is generally defined as an insurance company that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer's underwriting profits.
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Captive insurance company owners are willing to risk their own capital in anticipation of the financial rewards associated with better control over their insurance program. These include broader coverage, stabilized pricing and availability of insurance, and improved cash flow.
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5 days ago · A captive insurance company is a wholly-owned subsidiary that provides risk mitigation services for its parent company or related entities. The potential benefits of...
- Julia Kagan
Feb 15, 2024 · Basically, captive insurance is a type of self-insurance where a company creates a subsidiary insurer to provide insurance coverage for itself. It may also provide insurance to other...
Jul 1, 2021 · To be very clear, the purpose of an insurance company and, therefore, a captive is to pay losses (your own losses) and to afford you (the owner) more control over your risk and any losses that do occur. Put another way, captives are an alternative risk transfer mechanism used to finance risk.
Captive insurance is an alternative to self-insurance in which a parent group or groups create a licensed insurance company to provide coverage for itself. The main purpose of doing so is to avoid using traditional commercial insurance companies, which have volatile pricing and may not meet the specific needs of the company.
With higher premiums, a lack of capacity, increased deductibles, and more stringent terms and conditions, captive insurance use is more popular than ever. But is a captive right for your organization? How can it be used? What are the costs? How are they formed?
Jan 20, 2020 · Quite simply, a captive insurance company is a risk-financing tool — one that grants owners greater control (in both financial and risk management sectors) than that which is offered by traditional commercial insurance.
