CAPTIVES
Captives offer an alternative means of financing risks.
The definition of a reinsurance captive in European Directive 2005/68/EC is:
"A reinsurance undertaking owned either by a financial undertaking other than an insurance or a reinsurance undertaking or a group of insurance or reinsurance undertakings to which Directive 98/78/EC applies, or by a non-financial undertaking, the purpose of which is to provide reinsurance cover exclusively for the risks of the undertaking or undertakings to which it belongs or of an undertaking or undertakings of the group of which the captive reinsurance undertaking is a member."
The definition of a reinsurance captive in European Directive 2005/68/EC is:
"A reinsurance undertaking owned either by a financial undertaking other than an insurance or a reinsurance undertaking or a group of insurance or reinsurance undertakings to which Directive 98/78/EC applies, or by a non-financial undertaking, the purpose of which is to provide reinsurance cover exclusively for the risks of the undertaking or undertakings to which it belongs or of an undertaking or undertakings of the group of which the captive reinsurance undertaking is a member."
Financial flows - Download the chart
Advantages of a captive
- Optimisation of the benefits of a prevention policy
- Complementary alternative to traditional insurance arrangements
- Stabilisation of relationships with insurers
- Direct access to the reinsurance market
- Creation of a reserve to cover risks that are difficult to transfer
- Pooling of risks within the group
- Adaptation of the retention policy to the financial capabilities of the group
Benefits of a captive
- Reduced cost of risk
- Protection of company results and financial ratios
- Availability of reserves for the financing of risks that are difficult to insure