HOW A CAPTIVE WORKS
Simply put, a captive is a unique insurance company set up by its business owners to insure its own specific company’s risks. Captives are an effective way to take financial control of insurance allocations, manage risks and accumulate wealth. Captives should be used as a supplement to existing commercial coverages—and underwrite unobtainable coverages. A captive is a holistic approach to forming the company’s risk management strategy.
With a traditional insurance company, the insurer and its shareholders collect the premium and retain the profits. A business owned insurance captive's has the unique ability to manage, assign and script specific risks. A captive with little or no claims, builds up equity within the captive for future use by to reduce future premiums or distribute back to the company.
Risk distribution occurs when particular risks are combined in a "pool" with other, independently insured risks. Pooling is one of the tools an ARS Captive Solution utilizes to build a more stable underwriting portfolio and optimize the overall effectiveness of your Risk Management Program.
Advantages of a Captive
In addition to providing coverage when traditional insurance is unavailable or unreasonably priced, ARS Captive Solutions have numerous other risk sharing benefits and rewards, including tax-savings, lower costs, more control, a quick underwriting process and opportunities for wealth accumulation.
Download Client Guide
Our Guide to Captive Formation will help you determine if Captive Insurance is right for you. Learn more about the unique advantages of Captive Insurance, how Captive Pools operate, and the qualifications and requirements for getting started.
If you have uninsured or underinsured risks inside your business, forming a captive insurance company through ARS may be the best way to keep your business resilient, manage risk and accumulate wealth. We offer a free consultation to determine if an ARS Captive Solution is right for you.