Captive Insurance
Captive insurance is a risk management strategy where a company creates its own licensed insurance subsidiary to insure its own risks, rather than purchasing coverage from third-party insurers. It allows organizations to retain and control their insurance risks, potentially reducing costs and improving cash flow. This approach is commonly used for hard-to-insure or high-frequency risks in industries like manufacturing, healthcare, and finance.
Developers should learn about captive insurance when working on financial technology (fintech), enterprise risk management software, or insurance platforms, as it involves complex regulatory compliance, actuarial calculations, and data integration. Understanding this concept is crucial for building systems that handle premium calculations, claims processing, and regulatory reporting for self-insured entities, especially in large corporations or industry groups.