Captives as Risk Transfer Mechanisms


Captives as Risk Transfer Mechanisms focuses on how captives are used when risks are transferred between risk takers to improve risk financing efficiency. It discusses the types of risk that can be placed in a captive, techniques used to quantify risk and develop insurance rates, the underwriting processes, and how reinsurance is used to protect the captive. The flexibility of captive insurance allows captives to finance risk off or on balance sheet, depending on which approach delivers the most financial benefit. The course will also provide an overview of some of the approaches of accomplishing this, such as with finite risk protection, loss portfolio transfers, and special purpose vehicles. 

Learning Objectives

Upon completion, students will be able to:

  • recognize the risk management purpose of using a captive to finance an entity’s risks, identify the elements of captive insurance, and recognize why a captive can insure many types of risks
  • distinguish among various types of captive insurance companies from a risk financing perspective
  • identify factors to be considered in evaluating the cost of risk and recognize the various ways in which the costs of financing risks through a captive can be lower than the costs of commercial insurance or self-insurance plans
  • recognize the ways in which captive insurance and other risk financing methods can smooth the financial impact of risk
  • identify the types of reinsurance and the value that reinsurance can bring to captives

Designed For

Property and casualty risk, safety, insurance, finance, and accounting professionals.   


An understanding of risk financing principles and how the insurance industry is structured
International Risk Management Institute, Inc. (IRMI) is the premier provider of risk and insurance continuing education and reference publications, and is considered the ultimate authority by leading insurance practitioners. Written by industry experts, IRMI courses provide the most up-to-date, practical and reliable information possible.

Advanced Preparation


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