Captive Insurance

What is Captive Insurance?

Captive insurance is a type of insurance where a business provides coverage to itself. Authentic uses this model to enable vertical software platforms, business roll-ups, associations, and other communities to create their own insurance programs and capture underwriting profits.

Captive Structure

In the last decade, captive structures have emerged as a powerful alternative to standard business insurance. Whereas a majority of companies previously relied on external insurers, a captive structure allows them to own their own insurance program. The benefits? Captives not only help you save on insurance, but it allows you to gain from it, your business also can provide customized coverage, improve cash flows, and take potential tax advantages.

How does it work?

1. A parent sets up a captive insurance company (think of it as its own company), which assumes the risks of the parent and potentially other affiliated partners.

2. The captive assesses the businesses risks and determines appropriate premium amounts from the parent company

3. Premiums paid by operating businesses to the captive are then invested to generate returns and further strengthen the captives financial position

4. The captive utilizes the collected premiums as a line to pay for any covered losses or claims.

How does Authentic use the captive structure?

The captive structure has many benefits that enables businesses, but setting up and managing a captive requires careful planning, risk assessment, and compliance with regulations. Because of all these barriers to entry, captive insurance has not been an ideal model for businesses, until now.

Authentic is democratizing the world of captive insurance by providing a turnkey platform for partners, making the setup and maintenance process significantly easier. With our modern insurance stack, we eliminate the cost and complexity of captives, enabling your business to seamlessly integrate insurance offerings into your existing customer channels.