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Captives and Regulation – the good, the bad and the ugly

Reflecting on the AMRAE conference which took place in Lille, France from February 3rd to 5th this year, it was again a well visited event with a very interesting agenda.

Topics: Captive Risk Management

Captive Insurance Companies are dead – long live Captive Insurance Companies!

 

Since Frederic M. Reiss, “the father of captives” implemented the first captive insurance company there has been a continuous growth in net numbers, a trend which is still ongoing with annual growth of approx. 5%. Captives would cover “traditional coverages” such as Property/Casualty and were used as a risk management tool (Bawcutt, P. 1997) to
Topics: Captive Risk Management

Risk Management Requirements for Captive Insurance Companies

A captive insurance company is simply a commercial insurance company that has been formed by one or more parent companies to meet their needs. The main purpose of this captive arrangement is usually to ensure the parent's risks and assist with other risk management. Captives are growing in popularity because they can offer parent companies several advantages. These advantages can include an increased ability to control costs and design their own coverage.

Topics: Captive Risk Management

5 Key Challenges for Captive Insurance Companies and Parent Companies

In the last few decades, captive insurance companies have become more common. These captive arrangements provide many benefits to their parents that could include cost savings, tailored insurance coverage, and more control. However, in an increasingly complex and regulated business environment, captive insurance companies and their parent companies face new pressures. These include pressures to validate, consolidate, and access ever-increasing amounts of data. With that in mind, it might be helpful to consider some of today's major captive insurance challenges.

Topics: Captive Risk Management

What is Captive Insurance?

What is Captive Insurance? 

When one or more parent companies from an insurance company to handle their own risks, that is called a captive arrangement. Even though the parent insurers are typically not insurance companies, the captive has to conform to the insurance rules of its state or another domicile. In most cases, companies set up these captive arrangements for their own use. However, it isn't unheard of for these companies to actually provide coverage outside of the parent. One example might be using the captive insurer to also provide certain coverage for customers of the parent company, but there are others.

Topics: Captive Risk Management

2 Common Mistakes That Captive Insurance Companies Make

Setting up captive insurance companies allows parent companies to enjoy many benefits. These include the potential to save money on premiums, tailor coverage to a specific company's needs, and exercise more control over risk management. These benefits help explain the growing popularity of captive arrangements with all sorts of corporations and nonprofit organizations.

Topics: Captive Risk Management

3 Essential Tools for Captive Insurance Management

Even though insurance providers will provide most of their own reporting, companies still need to keep a close eye on captives to make sure they are providing the cost efficiencies that make the idea of captive insurers attractive to parent companies. For example, accounting still comes under the domain of the parent company's responsibilities. In addition, while the captive may perform most risk management functions, the parent company still needs a system that integrates with the captive's.

Topics: Captive Risk Management

The Benefits Of Captive Reporting And Data Management Technology

While the number of companies that form captives keeps increasing, there are a number of factors that are increasing the pressure on captive managers. These include regulations and compliance, controlling premiums, and not to mention the pressure of becoming a cost-effective solution for their parent companies. Still, many captive managers still rely on the old ways of captive reporting and captive data gathering. These processes are inefficient and unreliable. That's why a risk management system, or RMIS, is almost essential to captive organizations today.

Topics: Captive Risk Management data management

The Captive Manager’s Guide To Risk Management

Captive management is used as a way to formally self-insure. However, a captive manager doesn't decrease the need for risk management within both the parent company and the captive insurer. In fact, one of the reasons that these internal insurance companies are formed is to help improve risk reduction. 

Topics: Captive Risk Management