Captive Analysis

Managing your commercial property and casualty risk can come in various sizes and packages. While true guaranteed cost is a safe way to manage this risk, and alternative for your organization may be a Captive Insurance Program

A captive is an insurance company created and wholly owned by one or more non-insurance companies to insure the risks of its owner (or owners). Captives are essentially a form of self-insurance whereby the insurer is owned wholly by the insured .  If large enough, you could be in your own single owner captive, but in today’s market, the group captive market may be an excellent choice for a casualty budget as low as $100,000.  These group captives may be heterogeneous or homogeneous , as no size fits all.

The most common lines of business underwritten in a captive include:

• Workers’ Compensation & Employers Liability

• Commercial General Liability

• Auto Liability

Lines that are normally purchased outside of the captive:

• Equipment and Marine Insurance

• Umbrella Liability

• Professional Liability

The most common lines of business underwritten in a captive include:

• Lack of commercial market / capacity for certain lines of coverage/Rate increases continuous

• Desire to recapture underwriting profits and investment income

• Gain access to the reinsurance market

• Diversification into insurance services

• Potential tax benefits