HorizonRe is aiming to facilitate the creation of Captive Insurance Structures and the management of captive insurance companies. A captive insurance solution involves an arrangement whereby a separately formed company (the ‘captive’ insurance entity), within a group of related companies or persons, performs the function of insurer (or possibly reinsurer).

In general, Captive Insurance Companies are usually formed as a result of:

• Non availability of underwriting facilities;
• Insufficient market capacity;
• Positive understanding of the managing of risks;
• Aiming for a reduction in financial volatility behaviour and a stable premium trend.

The key advantages of captive insurance solutions are:

• Control of insurance destiny;
• Control over cash flow;
• Control of investment income;
• Direct access to reinsurance markets;
• Creation of insurance capacity;
• Establishment of multinational insurance protection and,
• Effective Risk Management which focuses on reducing and stabilising insurance costs.

A Captive Insurance Company should only be established after a comprehensive study of the existing insurance arrangements including, but not limited to, the evaluation of the risk management strategies of the parent company, the advantages identified and the threshold capital requirements are met.

The ‘Rent a Captive Insurance Company’ is owned, activated and operated by an Insurance Company. The insurance company rents out the captive insurance company to a corporation under certain terms, conditions and financial guarantees. The renting organisation will share the risks and the profits.