Tag Archives: Captive Management
Captive Management
Captive Management or the risk management is the way or the process of a captive insurance company which can invest income on premiums and reserves, coordinate the work of contracted services providers, and immediate benefit from improvements on loss control and claims experience, among other responsibilities. The company basically forms its own insurance company and can gain greater control by owning their own assurance group. The International Risk Management Limited (IRML) in Bermuda in 1962, was the first captive management company created by the “father of captive insurance”, Frederic M. Reiss. Most of the captive management is usually outsourced to a captive manager that holds the primary license for the captive. Some of the advantages in using captives to provide better risks management are: Cost, Flexibility, Claims management and Claims experience benefit.
Cost. The premiums charged include amounts to cover the insurer’s profit. Low cost of reinsurance allows the captive to build its reserved base.
Flexibility is taking the advantage of appropriate portions of its risks whether on a soft or hard market.
Claims management is the process of handling the cutting down on delays and bureaucracy that are often part of the claims handling procedure of insurers.
Claims experience benefit is when claims experience is better than anticipated, the excess net premium is retained by the group.
There are numbers of companies and affiliates focusing on captive management that offers full-line of insurance products, as well as commercial property, specialty risk and worker compensation, most of these groups are available to some of the main captive domiciles such as; the United States, U.K, Bermuda, Singapore, British Virgin Islands, and more.
Captive management indeed is a tricky business that needs expert schemes, planning and strategical handling, which could contribute in the overall success of the insurance company.
