What is Captive Insurance? A Comprehensive Guide in 2024

“Captives insurance” or “captive insurance companies” are industry terms that are often misunderstood or unfamiliar to insurance buyers.

Captives serve as a vehicle for organisations seeking a long-term, strategic approach to managing risk. As part of a comprehensive risk management program, a captive offers its owner greater control and improved governance over risk financing strategies.

It provides a formalised framework and discipline for funding self-insured risks and offers broader access to reinsurance capacity for risks the organisation prefers not to retain. This helps smooth volatility and leads to a lower total cost of risk.

From large multinationals to closely held companies, clients rely on Lockton’s captive consulting team for expert insight into the most effective and efficient approaches to captive insurance programs.

Learn about captives in our updated guide

Following positive industry feedback from our first guide (opens a new window), our updated commentary offers fresh perspectives and invaluable insights to empower organisations.

Download the full report (located on the right for desktop users and at the bottom for mobile users) for insights on:

  • The concept of captives and why they are formed.

  • Various captive structures available and how they work.

  • Determining if a captive aligns with your business objectives.

  • Domicile options available in the Asia Pacific region.

  • Steps to establish and effectively manage your captive.

  • How a large New Zealand-based company saved over NZ$2 million in the past five years through strategic captive insurance solutions.

The benefits of captives

Captives can provide a range of benefits, which can be considered in three main groupings:


  • Reduced insurance spend and retention of underwriting profits.

  • Improved cash flow.

  • Receive ceding commission.

Risk and Insurance

  • Direct access to the reinsurance or alternative market.

  • Cycle management and independence.

  • Funding of new and emerging risks.


  • Formal mechanism of risk retention and control.

  • Appropriate funding of risk retention.

  • Corporate governance considerations.

In case you missed it, the report is available for download on the right for desktop users and at the bottom for mobile users.

The contents of this publication are provided for general information only. Lockton arranges the insurance and is not the insurer. While the content contributors have taken reasonable care in compiling the information presented, we do not warrant that the information is correct. It is not intended to be interpreted as advice on which you should rely and may not necessarily be suitable for you. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication.

(opens a new window)
What is Captive Insurance? A Comprehensive Guide in 2024