Benefits of Captive
A captive insurance company represents an option for many corporations and groups that want to take financial control and manage risks by underwriting their own insurance rather than paying premiums to third-party insurers.
Coverage Tailored to Meet Your Needs
A captive provides additional options of insuring business risk that may not be unavailable or difficult to obtain in the traditional commercial insurance market.
Reduced Operating Costs
A captive allows a business to lower total insurance costs by purchasing risk transfer from wholesale/reinsurance companies, which saves premium dollar expenditures by eliminating profit loading by retail insurance companies, provides a more transparent brokerage commission structure, and lowers administrative costs. The captive can be used to finance risk at a lower cost than with traditional coverage. Many companies invest their saved premium dollars turning what was an expense into a profit center.
10XB can help you determine if forming a captive insurance company is the right move for your organization and if it will help improve cash flow and control expenses, putting you in control of how premium dollars are spent.
A captive provides direct access to wholesale market, pooling, claims, settlements, other risk layer tools, and investments. A captive also provides greater limits of coverage, easier access to reinsurance creating additional coverage capacity.
assets backing reserves earn a return, usually interest
Captive policies can cover very specific types of risk, allowing companies to more intentional about the types of coverage it provides.
Flexibility in deductibles for operating units and the policy can adopt its parent risk appetite bifurcated between SBUs
Risk becomes a financial incentive for the organization. Tremendous flexibility in managing risk
Just as insurance companies are provided a special tax treatment, a captive provides the same advantages for its owners, allowing captive participants to accrue tax-deductible reserves for unpaid claims, whether those claims are known or estimated.
• Direct access to wholesale reinsurance and syndication markets
• Additional negotiating leverage for underwriters