Dominic Wheatley, Chief Executive of Guernsey Finance,
explores how the Island's captive insurance specialists can
provide risk managers with an alternative solution for their
company's insurance programmes.
Risk managers might be unaware that their company's
insurance programmes could be enhanced, including by being more
cost effective, through the use of a captive insurance company.
Captive insurance
A captive is an insurance company which is usually formed for a
specific purpose, primarily self-insurance. It is called a
'captive' because, in its purest form, it is set up by its
owners only to insure the risks of its parent and/or fellow
subsidiaries. These can be established as either direct-writing
captives, who then use a third party reinsurer, or as reinsurance
captives, where a fronting company (conventional insurer) acts as
an intermediary. In either case, the major distinction from using
the conventional
