Alternative risk is a catch-all term for any insurance program involving some level of risk sharing including high deductibles, self-insured retention, and profit sharing. Captives are a subset of alternative risk.
Captive insurance is an alternative option for many corporations and groups that want to take financial control and manage risks. These companies underwrite their insurance by participating in captive ownership rather than paying premiums to third-party insurers. Marsh McLennan Agency is a leading captive insurer in the group captive space with over 600 clients in captive programs. We have access to a wide range of captive solutions, including programs exclusive to our clients. Our Captive Risk Practice is a dedicated team of professionals offering clients industry-leading expertise and captive insurance premiums.
A captive insurance company operates similarly to a traditional property and casualty insurance company. A captive issues policies, processes claims, follows all applicable regulations, files a property and casualty insurance company income tax return, and has profits and losses. If applicable, it also may have profits available to the insurance company owners. With an insured-owned captive insurance company, the owner(s) decide whether to retain or distribute the profits. The insurer and its shareholders retain the profits with a traditional insurance company.
Marsh McLennan Agency takes clients through a well-developed process from initial education to determining and implementing the best captive option. We also tap into Marsh McLennan's vast resources in the captive industry to offer cutting-edge captive management services and benchmarking data.