Risk tolerance is the willingness of an organization to incur risk to gain future reward
Risk sharing is a foundational principle in the entire insurance industry, not just for captive insurance.
A risk pool is a collective arrangement, where multiple entities, such as insurance companies or businesses come together to shrae and manage their risks.
Reinsurance is a way for insurance companies to protect themselves by sharing some of the risks they take on with other insurance companies.
Captives often use a fronting carrier, a licensed commercial insurer to issue policies.
Traditional insurance is intended to benefit the insurance companies first, without much thought to the businesses they insure.
A fronting carrier plays a critical role in captive insurance arrangements, providing several key benefits that facilitate the operation and regulatory compliance of captive insurers.
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