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Oct 17, 2022 · Captive insurance is a self-insurance solution where a company sets up its own (re)insurance company to manage part of its risk. Learn how captives can help reduce costs, fill gaps and cope with uncertainty in the current market.
- What Is A Captive Insurance Company?
- Understanding A Captive Insurance Company
- Tax Issues of Captive Insurance Companies
- Pros and Cons of Captive Insurance
- Examples of Captive Insurance Companies
- The Bottom Line
- GeneratedCaptionsTabForHeroSec
A captive insurance company is a wholly owned subsidiary insurer formed to provide risk mitigation services for its parent companyor related entities. Companies form “captives” for various reasons, such as when: 1. The parent company cannot find a suitable outside firm to insure it against particular business risks 2. The premiumspaid to the captiv...
A captive insurance company is a form of corporate self-insurance. While there are financial benefits to creating a separate entity to provide insurance services, parent companies must consider the associated administrative and overhead costs, such as additional personnel. There are also complex compliance issues to consider. As a result, corporati...
The tax concept of a captive insurance company is relatively simple. The parent company pays insurance premiums to its captive insurance company and seeks to deduct these premiums in its home country, often a high-tax jurisdiction. Today, several U.S. states allow the formation of captive companies. The protection from tax assessment is a sought-af...
Captives can be an attractive option for companies looking for ways to manage and distribute risk, but there are advantages and disadvantages.
A well-known captive insurance company made headlines in the wake of the 2010 British Petroleum oil spill in the Gulf of Mexico. At that time, reports circulated that BP was self-insured by Guernsey, U.K.-based captive insurance company Jupiter Insurance, and BP could receive as much as $700 million in coverage from losses. British Petroleum is not...
Insurance is a significant expense for large companies. Captive insurance companies offer a way for companies to control costs, reap tax benefits, and cover risks that commercial insurance companies might be unable or unwilling to insure. While setting up a captive can be challenging, third-party captive professionals can help companies navigate th...
A captive insurance company is a subsidiary insurer that provides risk management services for its parent company or related entities. Learn how captives can save costs, reduce taxes, and cover unique risks, as well as the drawbacks and examples of captive insurance.
- Julia Kagan
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.
Captive insurance is an insurance company owned and controlled by its insureds, who use their own capital to insure their risks. Learn how captive insurance works, what types of captives exist, and what advantages they offer over commercial insurance.
Learn how captive insurance can help businesses improve risk management, lower costs and increase efficiencies. PwC offers services for all stages of the captive life cycle, from feasibility and formation to ongoing maintenance and enhancement.
Objectives. Expand the use of captive insurance to drive business success. Focus on attracting and retaining sector professionals. Create dialogue with fellow members. Support resilience through climate change related risk management. Represent captive owners with the MAS.
Learn what a captive is, how it works, and how to use it for your business. This e-book covers the benefits, costs, steps, and tips of captive insurance.
