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How Single-Parent Captives Can Benefit from Captive Risk Pooling

Aug 28, 2017
How Single-Parent Captives Can Benefit from Captive Risk Pooling
From: Captive.com

Captive.com - Martin Eveleigh
Martin Eveleigh of Atlas Insurance Management explains the benefits of captive risk pooling. Many single-parent captives insure only the risks of just one or a few insureds and will be unable to achieve risk sharing. One solution involves the captive joining a risk pool. The benefits of captive risk pooling include volatility reduction, reinsurance protection, and offsetting reinsurance costs by sharing underwriting profits. With access to reinsurance, a captive may rely, in part, on other pool participants' capital and surplus. Risk pooling also allows a captive to achieve risk distribution in order for it to be treated as insurance for tax purposes.

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