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Captive insurance

Captive insurance facilities are a well established alternative or addition to buying insurance through the traditional insurance markets - approximately 80% of FTSE 100 companies, 50% of all FTSE companies and a substantial number of large private companies utilise insurance captives.

Captives suit businesses with a significant premium spend, a better than sector average loss ratio, a strong balance sheet and a sensible appetite for risk/reward. They can be used for own (i.e. first party) risks as well as customer (i.e. third party) risks and are increasingly being used by corporates, professional firms and others to manage specialist risks.

We assist in the delivery of independent, high quality captive feasibility studies to help businesses assess the cost/benefit of establishing various forms of captive insurance entities, including:

• Wholly-owned captive insurance companies;
• Cell captives within a protected cell company or PCC (in some domiciles a segregated account company or SAC) and often known as a PCC cell;
• Mutual insurance companies (often known as a mutual);
• Association captives or group captives (where a number of organisations wish to collaborate in forming a captive); and 
• Other alternative risk transfer (ART) vehicles.

Following a positive captive feasibility study, we can project manage the setting up of the chosen insurance vehicle, including:

• Finalising the choice of domicile;
• Captive formation documentation;
• Securing regulatory licences;
• Financial solvency requirements;
• Drafting/reviewing reinsurance agreements;
• Key financials;
• Assisting in the selection and contractual appointment of captive managers and investment managers;
• Tax strategy (via selected tax advisers);
• Programme structure;
• Drafting/reviewing policy wording; and
• Advising on the application of FSA rules and regulations.

For organisations that already operate a captive, we are able to deliver independent captive performance reviews and service provider reviews.

We also advise on issues concerning captives and other ART vehicles in the context of mergers, acquisitions and joint ventures.

Please call Nigel Wallis on 0151 906 1000 or email us via the link below.