ART is also common in the public and not for profit sectors.
Captive.com counts the advantages of self-insurance:
"The alternative to trading dollars with commercial insurers in the
working layers of risk, direct access to the reinsurance markets,
coverage tailored to your specific needs, accumulation of investment
income to help reduce net loss costs, improved cash flow, incentive for
loss control, greater control over claims, underwriting and retention
funding flexibility, and reduced cost of operation."
Captives come in many forms: single parent - i.e., owned by one company
to whose customized insurance needs the captive caters, multiple parent
- also known as group, homogeneous, or joint venture, heterogeneous
captive - owned by firms from different industries, and segregated cell
captives - in which the assets and liabilities of each "cell" are
legally insulated. There are even captives for hire, known as "rent a
captive".
The more reluctant the classical insurance companies are to provide
coverage - and the higher their rates - the greater the allure of ART.
According to "The Economist", the number of captives established in
Bermuda alone doubled to 108 last year reaching a total of more than
4000.
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