Who Should Consider a Single-Parent Captive?


A single-parent or pure captive typically provides a financial mechanism for current risks. These are attractive to organizations that need unique solutions that can be fully customized and complement the current insurance program. Caitlin Morgan insurance services provide the flexibility that a company is usually seeking when considering this type of coverage.

Financial Considerations

Many companies are drawn to single-parent captives because they are able to use surplus in the captive to attend to a client’s needs. These needs may include the ability to reduce future premium requirements and insure a new line of coverage. Retained loss limits of business units can be lowered by purchasing supplemental insurance to cover some or all of the deductible. There are start-up expenses and minimum annual operating costs that should be considered before opting for this type of coverage.

Absence of Risk Sharing

With a single-parent captive, there is none of the risk sharing that is present in a group captive such as a risk retention group. The client is solely responsible for any losses as the captive owner. This is beneficial because there is no need to help cover the loss experience of another participant. However, there are no other clients to share the burden in the case of the company’s own losses. Caitlin Morgan insurance services can supply the information necessary for companies to determine if a pure captive is a suitable solution.