Advantages of Captives

Advantages to forming a Captive include:

  • Lowering the cost of insurance
  • Obtaining insurance not otherwise available
  • Custom designing the type and level of coverage needed by the company
  • Controlling the claims process, particularly in litigation with third party insurance companies
  • Benefitting from good claims experience and providing an incentive for improved risk management
  • Having access to the reinsurance market where typical cost ratios are far less than conventional primary insurers and where a wider array of insurance products are available at more effective rates
  • Having investment control over the captive’s assets (i.e. reserves and free surplus) which can then be retained in anticipation of future losses or to fund shareholder distributions
  • Maximizing income tax, estate planning and business succession opportunities