Economic Benefits
Premium Retention
By creating your own insurance company, you retain the insurance premiums, net of any losses and claims, you would otherwise pay to your current insurance providers. These retained premiums are invested, and your captive can use these premiums for many purposes: covering future losses, paying dividends, making loans to your operating business, etc.
Tax Benefits
Captive insurance companies provide businesses with attractive tax benefits. The premiums paid to the captive insurance company are tax-deductible to your operating business, and compound in value in a tax-deferred manner at the corporate tax rate, which is likely lower than what you’re likely paying now.