Benefits of captives:

Insuring the uninsurable - provising of coverage either not readily available in the commercial market or priced prohibitivly

Cost reductions - reducing expenses such as administration and settlement of claims, loss control expenses, various state and federal taxes, brokerage commissions, and other acquisition costs and consulting fees.

Risk retention, risk management and loss control - achieving lower premium by retaining its own risk when a company has a better loss history than its industry average

Cash flow benefits - earning investment income and using more flexible premium payment plans

Access to the reinsurance market - accessing directly the reinsurance market which can be less expensive than conventional direct excess and umbrella coverage; there is also the opportunity to reduce costs by combining two or more lines of risk

Diversification into a profit centre - diversifying into open market insurance operations and operating as a separate commercial profit centre, including any profits generated from third party unrelated business.

"Unbundling" of services - unbundling technical services provided by its conventional insurer, such as separating risk control and claim handling services from the actual purchase of insurance cover.

Reduction of government regulations and restrictions - domiciling in a professional, yet flexible regulatory environment, widening investment opportunities and the facilitation of legitimate international movement of funds

Tax minimization or deferral - creating the potential to minimize or defer tax payments through properly structured and adequately capitalized captive insurance arrangements