Bring creativity to risk management.
Artex manages more than 400 Single-Parent Captives with premium sizes ranging from $300,000 to over $100 million. These captives are supported by one of the most experienced teams in the market, with expertise in all aspects of incorporation and management as well as redomiciliation and exit strategies. Our goal is to ensure that parent companies lock in the long-term value a Single-Parent Captive offers as an alternative risk transfer solution.
A Single-Parent Captive or Pure Captive is owned and controlled by one parent and insures the risks of the parent company and its affiliates. The captive operates as an insurer for its parent company or group, underwriting all or a portion of the risks of its owners. Virtually any line of coverage can be handled through a captive. The parent provides risk capital and premiums to the wholly owned structure in return for the cover the captive provides. In the event of a claim, the captive will pay the loss to the parent company. A Single-Parent Captive can also be used to write third-party insurance, which in essence is a profit-generating entity for the parent.
In addition, Single-Parent Captives are becoming a viable alternative solution in bridging the gap that exists in cyber liability risks between individual exposures and the coverage that’s available in the traditional marketplace.
Advantages of a single-parent captive.
- Provides flexibility to handle changing risk financing needs
- Facilitates business planning and cost allocation
- Offers greater ability to measure risk management program
- Provides direct access to reinsurance markets
- Receives potential tax savings
- Provides ability to set reserves for loss exposures
- Offers ability to control investment income
While the diversity and flexibility of a captive make it a compelling option for many organizations today, the structure is not right for everyone. Making the strategic decision to form a captive requires a detailed assessment of an organization’s overall risk profile, financial standing and business objectives, as well as a level of long-term commitment essential to fully capitalize on the benefits of such a strategy. Artex works closely with agents and brokers and their clients to confirm whether a captive is a viable and feasible option by conducting a full assessment of the company’s risk profile based on analysis of actuarial reports, investment models, insurance market conditions and any regulatory, legal or tax factors.
The captive market.
The Single-Parent Captive is the foundation of today’s captive insurance market. Since the early part of the 20th century when the first captive-type structure was formed, the concept has evolved to address the ever-changing demands of the corporate environment, and today approximately two-thirds of all captives are Single-Parent Captives.
Our Captive Consulting division, comprised of highly experienced specialist practitioners, ensures that every component of the captive is effectively structured and precisely aligned with a client’s risk and overall business objectives from day one. We handle all aspects of the process, from designing the captive, to managing the captive team – including brokers, lawyers, tax advisers and bankers – through liaising closely with local regulators to register and license the vehicle. The Artex staff also manages all the operational, functional and regulatory services so clients can focus on their core competencies.