
66 Pricing in General Insurance
Risk control. Captives can help a group manage its risks in-house by putting in place
risk control mechanisms, such as incentives for people to drive more safely or
driving lessons to reduce motor risks.
Tax reduction? Historically, captives have also been used for tax reduction purposes.
However, current international tax regulations and public opinion are making
this less of a factor.
Lighter regulatory burden. Captives are normally domiciled in locations with a lighter-
touch regulatory environment, which translates into lower costs and potentially
lower capital requirements.
4.1.2.3.1 How Are Captives Normally ...