Captive Insurance

The benefits of captive insurance are not just for Fortune 500 companies.

Investopedia defines a Captive Insurance Company as “a wholly owned subsidiary company that provides risk-mitigation services for its parent company or a group of related companies.” A captive insurance company can form for any of the following reasons: the parent company cannot find an outside firm to underwrite particular business risks, the premiums paid to the captive insurer create tax savings or the policy provided is more affordable or offers better coverage for the parent company’s risks.

For many years, only large corporations have enjoyed the many benefits of operating their own captive insurance companies. Most were established to provide coverage where insurance was unavailable or unreasonably priced. In recent years, however, smaller, closely held businesses have enjoyed the many benefits provided by captive insurance entities. Captive insurance offers attractive risk management, as well as lucrative taxplanning opportunities.

A properly structured and managed captive insurance company can offer the following:

  • Tax deduction for the parent company for the insurance premium paid to the captive
  • Various other tax savings opportunities, including gift and estate tax savings for the
    shareholders and income tax savings for both the captive and the parent
  • Opportunity to accumulate wealth in a tax-favored vehicle
  • Distributions to captive owners at favorable income tax rates
  • Asset protection from the claims of business and personal creditors
  • Reduction in the amount of insurance premiums presently paid by the operating company
  • Access to the lower-cost reinsurance market
  • Insuring risks that would otherwise be un-insurable

Ideal Candidates for Captives

The use of a captive should be considered for entities that meet the following criteria:

  • Profitable business entities seeking substantial annual adjustable tax deductions
  • Businesses with multiple entities.
  • Businesses that can create multiple operating subsidiaries or affiliates
  • Businesses with $500,000 or more in sustainable operating profits.
  • Businesses with requisite risk currently uninsured or under-insured.
  • Business owner(s) interested in personal wealth accumulation and/or family wealth transfer strategies.
  • Businesses whose owner(s) are looking for asset protection

COX Capital Group encourages companies to invest in and own a captive insurance company if they meet the Internal Revevue Service guidelines. If properly designed and launched by the qualified professionals at COX Capital Group, the benefits of forming a captive for your businesses are notable and include savings on commercial insurance already owned, asset and credit protection, the potential to create a new profit center and increased operation cash flow.


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New York, New York 10005
(212) 232-0032

COX Capital Group is a boutique investment banking firm
headquartered in New York City.


COX Capital Group Limited
71-75 Shelton Street
London, Greater London, WC2H 9JQ
United Kingdom
Registered Company #112219153


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