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Captives

CLP Insurance Brokers' Management are experts at arranging captives and we advise, design and assist in the management of a suitable programme in response to specific coverage requirements.
Captive insurance companies are insurance  or reinsurance companies established with the specific objective of insuring risks emanating from their parent group or groups.  Developed in the late 1960’s and the majority are based in offshore locations.
The main types of captive:

  • Single Parent is a Company established to insure risks solely related to its own activities or affiliates.
  • Group is for trade associations or groups with similar exposures (ie medical or legal professions)
  • Rent-a-Captive is a Company that rents its capital, reserves and license to operate.
  • Agency Captive is a reinsurance company owned by an insurance agency or brokerage firm in which they may participate in a portion of their client's risks.
  • Association Captive is an insurance company owned by a trade, industry or service group for the benefit of its members.  The Benefits can be split into Financial and Insurance as follows:

Financial

 

  • reduces cost of traditional insurance programmes by avoiding administrative overheads.
  • Captures underwriting profits and investment income on premium.
  • Earn additional investment income on unpaid loss reserves.
  • Stabilizes insurance premiums in hard and soft markets (because premium is based on Captive Owner’s loss experience rather than industry wide perceptions).
  • Provides access to professional reinsurers.
  • Tax advantages (depends on location).

 

Insurance

 

  • More control over risk management.
  • Programmes designed in response to specific coverage requirements.
  • Can provide coverage for exclusions imposed by traditional market wordings or risks the market doesn’t want to insure.
  • Can insure deductibles.
  • Allows individual units within Company or affiliates to have coverage/deductible they require and still maintain control at Corporate level.
  • access to Professional Insurance Market (enables structuring opportunities not available in retail market and provides access to wholesale quotes which primary market can’t offer.
  • Loss prevention – emphasis on cause of loss etc and as Captive matures is greater capacity to retain more risk giving room to reduce premiums further.


CLP Insurance Brokers' Team of experts will carry out a captive feasibility study with you and provide advice and guidance on the business information required and the procedures to establish a captive.


CHANNING LUCAS AND PARTNERS LTD

CHANNING LUCAS & PARTNERS LIMITED IS AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY. OUR FCA REGISTRATION NUMBER IS 490683. REGISTERED OFFICE IS ST CLARE HOUSE, 30-33 MINORIES, LONDON EC3N 1PE. REGISTERED WITH COMPANIES HOUSE FOR ENGLAND AND WALES COMPANY NUMBER 6229756