Understanding a Single Parent Captive

When organizations and corporations look for insurance alternatives and ways to manage their corporate risk they oftentimes turn to insurance captives.

When it comes to insurance captives available to businesses, the single parent captive (or pure captive) is the most simple. When one organization or company owns, controls and manages a captive it is considered a single-parent captive. These single-parent captives are formed to insure the company and its subsidiaries. Companies choose to utilize single-parent captives because they can help regulate insurance costs with more consistent and stable pricing from year to year. Organizations are drawn to captives because they offer flexibility. The owners maintain control of coverage, limits and providers as well as other operational aspects.

Industry experts like Caitlin Morgan cite single-parent captives as the most popular type of captive in the market today. Single-parent captives have been around for decades and continue to provide the lower costs and improved cash flow companies are looking for. There are numerous benefits to taking advantage of insurance captives but there are things to consider, too. Make sure you partner with an industry expert before you make your decisions. A little proactive research on your part can ensure you choose the right insurance coverage for your organization.