Originally published in The Broker, Summer 2009
Mike Johns looks at the use of captives and Protected
Cell Companies for insurance and the benefits for both the
independent broker and the SME.
The concept of retaining risk through the use of a captive
insurance company is not a new one. The original captive dates as
far back as 1957, yet many independent brokers are still reluctant
to introduce their clients to the concept and have overlooked the
advantages such a vehicle could bring both to their client and
their broking business.
In 1997, Guernsey introduced Protected Cell legislation which
provided a more cost effective way of entering into self insurance.
This effectively extended the "captive concept" to the
small and medium sized enterprises (SMEs) which previously had been
the sole realm of large multi-national companies, such as those
appearing on the FTSE100. Whilst the PCC has been incredibly
successful, and is now available in most domiciles, many SMEs
