The Claims Benefits of Captive Insurance over Traditional Insurance
There are numerous claims benefits to a parent company with captive insurance over traditional insurance, according to Lynn Sheils, general counsel of EWI Re. Captive owners commonly set up captives in order to control the parent company's destiny. With claims being the largest component of the cost of risk and with claims being so visible, taking control of their own claims gives captive owners the control they seek. Benefits of increased claims handling control give an organization the ability to (1) settle claims quickly to protect reputation and brand, (2) litigate claims to set a precedent or to avoid claims piling, (3) choose legal counsel and special fee arrangements, and (4) control the cost of risk.