It is probably something you have never considered or never wanted to consider but before you dismiss it out of hand, consider the benefits it can bring!
High net worth individuals, families, trusts and their businesses can now own their own insurance company through the formation of a Captive Insurance Company.
Captives have been used for years as an alternative risk strategy by corporates seeking to insure large complex risks outside of the traditional insurance markets. They benefit from lower insurance premiums, structure capital to generate investment returns, accumulate and distribute underwriting profits and provide a more efficient tax structure.
The Captive market has really developed and is one of the fastest growing business models in the US. They now provide a number of different models including Protected Cell Companies for individuals and families and their assets, which have less onerous capital requirements but maintain the benefits of a pure Captive.
So what would you place in your Captive? The answer should be a broad array of risks including physical and financial assets, liabilities, medical, pensions, life and specialist ‘uninsured’ risks. Your international property portfolio, fine art or classic car collections are all candidates for the Captive treatment… plus start-up and management costs are relatively low.
High net worth individuals, families, trusts and their businesses should always consider a Captive as part of their insurance strategy - think of the bragging rights!