Today, captives can be sponsored by a third party and underwrite third party risks. There are now close to 7,000 captive insurers worldwide. Over 90% of Fortune 500 companies employ some type of captive insurance company arrangement.
The advantages of captives are multiple and can be significant:
- Potential short and long-term cost savings
- Customized employee benefits designs and property & casualty programs
- Enterprise risk financing applications
- Potential financial efficiencies like cash flow and insurance