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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

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