What is a Captive Insurance Company?
Your business faces risks every day, some typical, some not so typical but no one understands the risk you face better than you do. A captive insurance company is a vehicle that allows a company or group to manage some of their own risks as part of an overall risk management strategy. It is a licensed and regulated insurance or reinsurance company whose business is supplied and controlled by its owners, who are the principle insureds.
A captive insurance company can provide for better control of risk management and opportunities to reduce costs. Captive insurance laws in Missouri allow for a variety of flexible options to manage your mainstream as well as non-traditional risks where traditional insurance coverage may not be readily available or best suited for your particular needs.
Some of the advantages of captive insurance companies
Since you know best what your risks are and understand your operations better than any third party, you are in the best position to efficiently manage those risks. Captive insurance companies are an option for many types of companies and groups to financially control and manage their own risks rather than pay premiums to a third party insurer.
Some of the advantages your company could realize include:
- Coverage tailored to your specific needs.
- Premium based on your loss experience, not industry average.
- Reduced operating costs.
- Increased coverage and capacity.
- Investment income used to fund losses.
- Direct access to wholesale reinsurance markets.
- Funding and underwriting flexibility.
- Greater control over claims and incentive for loss control.
- Additional negotiating leverage with underwriters.
- Flexibility in managing risk.