What is a Captive?

A captive insurance company is an entity formed in a particular domicile primarily to insure the risks of the corporate parent and/or one or more other related entities, thereby contributing to a reduction in its parent’s long term cost of risk coverage. Captives are formed for a number of economic reasons which include, lower insurance costs, cash flow, risk retention, unavailability of coverage, risk management, access to the reinsurance market, writing unrelated risks for profits and tax minimization and deferral.

  • Are there Different Types of Captive Structures?

    Yes. There are five different types of captive structures: Single Parent Captive, Group Captive, Association Captive, Agency Captive and Segregated Cell Captive.

  • What is a Single Parent Captive?

    It is a captive that insures the risk of its parent company and other affiliated companies.

  • What is a Group Captive?

    It is a captive that insures the common risk of a group of companies in the same industry.

  • What is an Association Captive?

    It is a captive that insures the risk of members of associations such as ship owners, dentists, lawyers, doctors, tradesmen.

  • What is an Agency Captive?

    It is a captive that is created by an insurance company to reinsure the insurance company’s insurance portfolio.

  • What is a Segregated Cell Captive?

    It is captive that is divided into “cells” and each cell reinsures the risk of the shareholder of the cell. The shareholder of each individual cell is protected from the liabilities incurred by other cells in the captive.

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Working closely with our clients and their legal, accounting and investment experts, we analyse each situation in depth and detail. Each insurance solution is tailored to comply with the laws of the country in which you reside with a view of taking advantage to the fullest extent possible of the tax, asset protection and other advantages afforded to life insurance under the applicable laws.