Financing Strategy

Captives are becoming an increasingly important component of the risk management and risk financing strategy of their parent. This can be understood against the following background:

* heavy and increasing premium costs in almost every line of coverage;
* difficulties in insuring certain types of fortuitous risk;
* differential coverage standards in various parts of the world;
* rating structures which reflect market trends rather than individual loss experience;
* insufficient credit for deductibles and/or loss control efforts