What Is Captive Insurance? | Top Captive Insurance Companies

Captive Insurance Definition

The term captive was coined by the father of captive insurance Fredrick M rice”. Firstly He has tested concept into practice for his first client, Younstown Sheet and tube company in the 1950s. It includes shielding the parent or main company from the risks or certain future losses. It offers an alternative method to minimise the financial loss. Establishing a correct policy for specific set of potential risks in running a business can be complicated. It is very difficult to have such policy that cover every risk that needs to be covered in reasonable price range and some risk might consider altogether uninsurable. Examples of top captive insurance companies are

List Of Top Captive Insurance Domiciles

According to wmsolutionsnow.com , WMS,LLC has carefully researched all 24 US based Captive Insurance Company domiciles and all 35 foreign Captive Insurance Company domiciles which are the best for forming, licensing, managing and opearating a Captive Insurance company. Learn More

Traditional Insurance Vs Captive Insurance

  • traditional insurance have volatile pricing
  • The captive can reinsure traditional lines including workers compensation, general liability, Auto liability, professional liability and credit risk.
  • Used to provide coverage and limits
  • Form under Special Laws

Goal For Taking Captive Insurance

Primary goal of captive insurance is to continuously

  • prevent
  • manage
  • and, protect the assets from unknown risk

Benefits

  • Tailoring coverage to meet your specific needs
  • Reduced operating cost
  • Increased cash flow
  • Greater coverage and capacity
  • Investment income to fund losses
  • Access to wholesale reinsurance markets
  • Flexibility in both funding and underwriting
  • Greater control over claims

Over 90% of Fortune 1000 comapnies and many successful middle market businesses have captives. so half of  property and casualty premiums are written through captives. Small PNC captive also known as a micro captive.

It used by mid-sized companies looking for cost effective ways to transfer risks as a result this insurance buyer is a valuable cost saving tool long utilized by fortune 1000 companies. The section 831 B captive is one of the most popular choices for middle market companies

Some Examples 

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 a Guernsey-based captive insurance company called Jupiter Insurance. So could receive as much as $700 million from it. British Petroleum is not alone in this practice, as many Fortune 500 companies have captive insurance subsidiaries.

Conclusion

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