Captives and Self Insurance
With trade risk management, captives can provide structure around a self insurance solution and a platform to access catastrophic cover or wholesales reinsurance as needed. The largest of companies can use their existing insurance captive to set up a trade risk program. Alternatively credit cell captives, with most of the benefits of the traditional captives, can be set up at minimal cost and investment. Some of the benefits of a captive approach can include:
Increased awareness of trade risk management.
Credit control discipline across a group of companies.
Greater credit capacity on your larger and higher risk customers.
Potential for insuring the uninsurable - use of situational reserves to agree certain commercial and market driven credit decisions quickly and confidently.
Lower expenses compared to traditional insurance company approach.
Reduction and stabilization of insurance cost including direct access to lower cost reinsurance market and realizing the benefit of good claims experience.
Third party credit cover can be limited to catastrophic risks.
More flexible vehicle for tax mitigation strategies