CAPTIVE INSURANCE
LARGE CORPORATE
A captive insurer is generally defined as an insurance company wholly owned and controlled by its insureds. 90% of Fortune 1000 companies have captives
7,000 captives in the world o 50% of non-life insurance premiums written through these captives
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ADVANTAGES
o Reduction in overall risk costs
o Improve and tailor coverages
o Participation in underwriting results
o Access to wholesale reinsurance markets
o Earn interest income o Maintain stability of pricing
o Secure broader coverage
o Participate in claims management with greater control
o Improve cash flow
o Inculcate risk improvement to improve operational efficiency
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TYPES OF CAPTIVE
o Form & own by ABC Corp. to underwrite for it’s subsidiaries & qualified associate companies
o Holding owned captive collects premiums, pay losses, derives investment income from the operating companies supporting the captives Beneficial ownership belongs to shareholder only
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HOW TO FORM A CAPTIVE COMPANY
o Form & own by ABC Corp. to underwrite for it’s subsidiaries & qualified associate companies
o Holding owned captive collects premiums, pay losses, derives investment income from the operating companies supporting the captives Beneficial ownership belongs to shareholder only