Introduction
For organisations with a thorough understanding of their own risk profile and a relatively good loss experience, captive insurance can be an effective risk financing mechanism. Benefits can include more control, more flexibility, enhanced risk protection, improved cash flow and ultimately, a reduced cost of risk.
A captive insurance company or “captive” is an insurance company created and owned by an organisation outside the insurance industry, which insures the risks of its parent or other subsidiaries. In other words, it’s like having your own private insurance company (an insurance company that is held “captive” to your own organisation).
Over the last 20 years, captives have become a well-established mechanism used by medium-to-large organizations to finance risk in a cost-effective way. Today there are over 4,000 captive insurance companies throughout the world.
Advantages
Reduce insurance premiums or the cost of risk
Your captive will accrue the profit that would otherwise have been passed to your insurer, and administrative charges can be eliminated.Stabilise insurance costs
By reducing reliance on the traditional insurance market.Obtain affordable cover for unusual or complex risks
By gaining access to the reinsurance market through your captive insurer.
Generate additional revenue
By underwriting insurance offered as an add-on to your core product or service. For example, an electronics retailer may sell extended warrant insurance at the point of sale.Improve insurance coverage
By being able to issue bespoke policies ensuring no gaps in cover.Improve cash flow
By retaining the funding for losses within the corporate group, as well as earning investment income on the accumulated contributions and loss reserves (which would otherwise go to the traditional insurance company).
Process
Robus can support you and manage the entire process, from company set-up and licensing through to ongoing management. Our teams in Guernsey and Gibraltar have considerable experience in the formation and management of insurance companies.
For those considering bearing insurance risk for the first time, we recommend a Feasibility Study to ascertain whether this would be strategically and financially beneficial and to provide analysis of the different structures and domiciles available. We will be honest in our assessments, outlining your options along with the various costs and benefits in an unbiased way.
For more information on our insurance management services click here >
Key Contacts
You can download our flyers on Captive Management Services below, but we’d prefer to talk to you to understand your business and provide tailored advice.
Paul Cole
Paul is a member of the Chartered Institute of Management Accountants, a graduate of the Financial Times NED Diploma scheme and a member of the Chartered Insurance Institute. Paul has over 15 years of experience working in the insurance industry and 13 years working in investment banking in the City of London. Paul holds several positions on the Board and sub-committees of Gibraltar domiciled general insurance companies. He is a member of the Gibraltar Insurance Association Executive Committee.
(Gibraltar/Group)
PAUL COLE | Managing Director Gibraltar &
Group Chief Operations Officer
T +350 20077065
E paul.cole@robusgroup.com
Jamie Polson
As Managing Director, Jamie has overall responsibility for the Guernsey office. He has over 25 years experience in the finance sector, beginning his career in private banking and moving into the insurance industry in 2001. Jamie has been a Board member with Robus since joining the company in 2014 and provides a wealth of risk management expertise along with a strong background in accounting, corporate governance, company secretarial, compliance and regulatory.
Over the past 20 years Jamie has managed a significant and diverse range of licensed insurers. This includes some of the largest captives in Guernsey along with many commercial general insurers and reinsurers. He also has years of experience as a director on PCCs which are set up for the provision of ILS.
(Guernsey)
JAMIE POLSON | Managing Director Guernsey &
Group Finance Officer
T +44 (0)1481 742556
E jamie.polson@robusgroup.com
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