Faced with the crisis that is afflicting the whole world, companies need new risk financing solutions. Captive insurance companies could represent an avenue to explore.

Marked by significantly higher price negotiations and a reduction in guarantees, the insurance market is hardening. Among the alternative risk financing solutions available to companies, we find in the forefront: captives.
There are two types of captives. Captive insurance and captive reinsurance. The captive insurance company is on the front line, while the captive reinsurance company works with a traditional insurer. The captive insurance company collects insurance premiums from all of the group's entities, for the identified risk or risks. Each year, the contributions are thus provisioned within the captive. In the event of a claim, it compensates the structure affected according to the conditions defined in the contract. The reinsurance captive enters into an agreement with an insurer. It is he who, in general, collects the premiums for his own account and that of the captive. In the event of a claim, the captive is called upon by the insurer for amounts determined beforehand.
These captives are subject to strict regulations and must in particular comply with the European Solvency 2 directives, with its share of constraints in terms of solvency and governance. The captive system also makes it possible to pool risks between the subsidiaries. But, due to financial and regulatory constraints, captives are rarely accessible to SMEs, and are instead used by groups.