What is the difference between captive and self insurance?
In captive insurance contracts, owner companies pay regular premiums to the insurance carriers the same as a commercial insurance contract. Self insurance is essentially a fancy term referring to age-old financial wisdom. Setting aside money for emergency situations is a solid strategy for both personal and business finances.
What are the benefits of captive insurance?
Improve risk management, lower costs and increase efficiencies. Why captive insurance? A “captive” is a licensed insurance company utilized to insure a wide range of risks depending on business needs.
What is a reinsurance captive?
For reinsurance captives, Swiss Re can act as a fronting insurance company, issuing the policy and then ceding the risk into the captive. What benefits do captives offer? A captive bundles the risks of diverse business units and “uses internal risk diversification effects as a way to bring down the total cost of risk”, Keist says.