# Captive Insurance

*Insurance — Finicade finance glossary*

A captive is an insurance company owned by the business it insures, so the parent keeps the underwriting profit and investment income.

A captive is an insurance company owned by the business it insures, formalising self-insurance so the parent keeps the underwriting profit and investment income instead of paying it away. It also gives direct access to reinsurance markets. Because captives carry tax advantages, small captives have attracted persistent scrutiny from tax authorities where the insurance element looks nominal.

**Also known as:** captive insurer, captive

**Related terms:** [Self-Insurance](https://finicade.com/glossary/self-insurance), [Reinsurance](https://finicade.com/glossary/reinsurance), [Insurance Float](https://finicade.com/glossary/insurance-float), [Tax Haven](https://finicade.com/glossary/tax-haven), [Risk Appetite](https://finicade.com/glossary/risk-appetite)

Source: https://finicade.com/glossary/captive-insurance