What defines a group captive insurance company?

A group captive insurance company is characterized as being owned by a group of companies that come together to address their collective insurance needs. This structure allows member companies to pool resources and share risks, which is particularly beneficial for managing costs and addressing specific risks that may not be easily covered in the traditional insurance market.

Group captives typically focus on providing coverage for a specific set of risks that are common to the member companies, thereby creating a tailored insurance solution that better meets their collective needs. This model fosters collaboration among businesses within the same sector or industry, promoting a sense of shared responsibility when it comes to risk management.

In contrast, ownership by one individual does not align with the essence of a group captive, which relies on the participation and investment of multiple entities. Similarly, while capturing risks for an industry group could describe certain characteristics of captives, the critical element here is the shared ownership among multiple companies rather than merely being formed for an industry sector. Finally, a public company insuring various risks doesn’t fit the definition of a captive, as it lacks the ownership structure and risk-sharing characteristic inherent to group captives.