Understanding Captive Insurance

Thousands of companies throughout the United States utilize captive insurance in the form of a captive insurance company as part of their corporate risk management strategy.

What is Captive Insurance?

A captive insurance structure is an insurance company that is entirely owned and managed by the insured entity. Instead of depending on traditional commercial insurance solutions, businesses can utilize a captive to directly cover their own risks. This strategic, customized approach provides enhanced control, potential cost savings, and tailored coverage options.

Key Benefits of Captive Insurance

• Cost Savings
  A captive insurance structure enables self-insured businesses to reduce their costs by lessening their dependence on third-party insurance providers.
• Improved Cash Flow
  By using a captive, businesses can avoid sudden premium hikes, resulting in smoother financial planning and budgeting.
• Customization of Coverage
  Captives offer companies the flexibility to design coverage that meets their specific needs, including comprehensive, specialized, or niche options that might not be readily available through traditional insurance channels.

Learn More - Right Here! To help you better understand captive insurance, SIIA has produced a series of short educational videos, which can be accessed below.  These videos are supplemented by additional reference material further below.

Episode 4 | P&C Captives

Episode 5 | Stop-Loss Captives

Episode 6 | Captive Service Provider

• Managing the Cost of Corporate Risk Through Active Insurance Solutions

• SIIA Captive Survey Shows Steady Growth (Nov. 2024)
• Captive Insurance Arrangements: When Are They Insurance for Federal Tax Purposes? | Pt. 1 (Oct. 2024)
• Captive Insurance Arrangements: When Are They Insurance for Federal Tax Purposes? | Pt. 2 (Nov. 2024)
• Captive Programs Help to Stem the Rising Tide of High-Cost Medical Claims (Oct. 2024)
• Stop-Loss Captive Partnering is a Growing Trend (Sept. 2024)
• Changing Alternative Energy Market Relying on Captives (Aug. 2024)
• Captives Reduce the Sting of P&C Hard Market (Jul. 2025)
• Captives Providing Stability in the Cannabis Industry (Jun. 2024)
• Group Captive Market Thriving (May 2024)
• Captive Use for Employee Benefits Increases (Apr. 2024)
• Companies Turning to Captives to Manage Inflation (Mar. 2024)
• More Growth and Awareness Seen for Captives in 2024 (Feb. 2024)
• Contractors turn to Captives to Gain Control (Jan. 2024)
• Medical Stop-Loss Group Captives Filling coverage Gaps (Dec. 2023)
• Industry Bullish on Captives (Nov. 2023)
• Costly Weather Events Fuel Captive Interest (Oct. 2023)
• Small Employers Turn to Captives to Manage Rising Drug Claim Costs (May 2023)
• Captive Formations Rise as Insurance Market Hardens (Apr. 2023)
• No Surprises Act Creates Advantages for Captives (Feb. 2023)  

Ready To Go and Need a Guide?
For those who have learned about captive insurance and are now interested in taking the next step in determining how to utilize this for their own company, you can find qualified captive insurance managers/advisors as part of The Self-Insurance Directory, which can be accessed here. These experts can help you determine viability and provide the necessary implementation and management guidance.