A Great Alternative
Life of Louisiana has developed a long-term strategy for businesses looking to
reduce current taxable income and take advantage of the tax deferred compounding
of investment income. This concept has been around for many years and is
a viable option for those businesses willing to participate in risk sharing. Life of
Louisiana will help your company establish its own captive reinsurance company.
The captive concept has been in use for over 100 years, but in the 1950s the
prevalence of captive structures began to increase. In the early 1980s there was a
significant surge in acceptance, with steadily climbing numbers ever since. Captives
have now become a popular option for companies that desire more control over their
own business and are willing to take a long-term approach to business decisions.
Over the past few decades especially, the arrangements have gained in popularity
as companies have placed stronger emphasis on margins and profitability and
developed a greater appreciation for the value of partnerships.
By the end of last year, captives totaled close to 4,500 worldwide. Note the illustration
below. The growth of the captive concept is increasing.
Providing a financial structure that not only helps manage risk but also minimizes the
cost of doing so, captive reinsurance has become an accepted risk-management
alternative in a wide range of industries, from telecommunications and transportation
to housing, finance and insurance. However, your Life of Louisiana representative will
discuss the advantages or disadvantages of your company taking more or less risk.
Captive Reinsurance Companies