Captive insurance represents a unique risk management approach where businesses establish their own dedicated insurance entities. These captives are primarily formed to ensure the specific risks of the founding company or group, granting them direct oversight over insurance policies, premium management, and claims handling.
A group captive is a variant of captive insurance, formed when several businesses, typically sharing similar industry risks or operational characteristics, collectively establish a captive insurance company. This collaborative approach allows smaller entities to pool resources, distribute risks more effectively, and leverage economies of scale that are unattainable individually. Group captives inherit the core benefits of traditional captive insurance, such as bespoke coverage and proactive risk management, while minimizing the financial and administrative demands often associated with a single-parent captive.