Captive Insurance

Captive Insurance

Captive Insurance solutions are becoming an increasingly common risk management tool.
A method of self-insuring, the insured invests their own capital, retaining a portion of the risk rather than transferring it to an insurer.

A captive solution works when traditional products offered by insurers don’t meet the risk financing needs of the insured. If coverage is limited, non-existent, or too expensive, a captive approach can reduce costs and bring stability and control to the coverage.

Lines of business that benefit from Captive Insurance include:

  • General Liability
  • Professional Liability (E&O)
  • Medical Malpractice
  • Directors & Officers (D&O)
  • Cyber Liability

Captive Insurance Benefits

  • Transparency on premiums, claims processes and costs
  • Control of the company’s overall financial position and employee product offerings
  • Protect against market costs and coverage fluctuations that happen within the volatile commercial insurance options on the market that hike up premium rates
  • Potential for profits for group captives as they typically allow members to earn dividends on unused funds. Plus, underwriting profits can be optimized by adopting rigorous risk control practices and claims management
  • Ability to structure plans with customizes offerings with unbundled services
  • Flexibility to offer customised policies not otherwise available in the conventional market.
  • Direct access to reinsurance at a lower cost than in the traditional market that take place in the traditional market

Main Types of Captives

  • Single Parent Captive
    • an insurance or reinsurance company insuring only its parent or affiliated companies.
  • Group Captive
    • an insurance company that insures or reinsures the risks of a group of potentially unrelated companies which have a common goal.
  • Association Captive
    • a company formed and owned by a trade association or group of service providers to provide insurance for its members.

At Taycon we feel captive insurance should be available via the broker channel for its commercial policy holders.

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