Why Form a Captive?

Why form a Captive ?


  • Maximizing profit – Underwriting profits can be optimized by adopting rigorous risk control practices and claims management
  • Reducing costs and administration expenses – Transaction costs and administration expenses can be controlled compared to traditional insurance programs thus reducing the overall cost of insurance.
  • Investment of premiums – Captives have the ability to earn investment income on underwriting premium prior to its application to pay claims.
  • Improved coverage – Captive insurance companies have the flexibility to offer customised policies not otherwise available in the conventional market.
  • Improvement in cash management – Captive insurance companies are able to design cash management controls to optimise use of capital
  • Access to reinsurance – Captives have direct access to reinsurance at a lower cost than in the traditional market.
  • Stability of rates – Captive insurance companies are able to avoid the movement in premium rates that take place in the traditional market
  • Business focused regulation – Captive insurance companies are able to take advantage of the flexible regulatory approach in the Cayman Islands while still meeting internationally recognised standards.
  • Possible tax advantages – The Cayman Islands has no income, corporation or premium taxes and provide a renewable twenty year guarantee against the imposition of such taxes. However, owners should always seek appropriate tax and legal advice.