Captive Insurance services
What is a Captive Insurance?
A captive insurance company is a reinsurance created or owned by an industrial, commercial or financial group and used to reinsure exclusively all or part of the risks of the group to whom it belongs. Using a captive insurance will help to face fierce competition by saving in the purchase of traditional covers, enhancing risk management and control improvement, supporting other business strategies and optimizing the whole financial policy of the mother company.
Furthermore, captives insurance allow companies to develop a more flexible tailor-made insurance system with direct access to the reinsurance market and thus cut-back insurance costs and stabilize insurance budget.
Creating, acquiring and managing a captive insurance can be a tricky process. You will need to go through five main steps:
Setting up a captive insurance company require actions such as understanding the market and operational processes, gaining a comprehensive understanding of the undertaking insurance profile, exploring potential solutions and involving key stakeholders (Board, CFO, CRO, etc.),
The company will need to assess the risk profile and other related items such as insurance structures, mid- and long-term strategy, resources, domicile, tax and financial strategy, actuarial simulation, business plan, etc. These steps will define the feasibility of the project,
The captive insurance company has to be physically created,
The captive must be managed to constantly fulfil regulatory, technical, tax and solvency requirements,
Exit or closing
A captive might not be useful anymore when it comes to using capital most efficiently. When this is the case, its owner must either exit it or reshape it (closing, selling, restructuring, etc.).
Deloitte services offering
To successfully accompany your business through these steps, Deloitte can help you to:
- Review the current situation and the needs of the company to determine the best strategy,
- Produce a consistent report containing all aspects of the chosen solution (regulatory, tax, technical factors, etc.) and scheduling the setting up of the captive company,
- Contribute to the setting up of relevant contracts and treaties as well as to training the staff.