What is Captive Insurance?

It is managing insurance in-house by floating a separate entity to manage insurance needs of group companies.

A Captive Insurance is that one which provides risk mitigation service to its Parent Company.

Captive Insurance company may be formed if the parent company is unable to find an outside firm to insure against a particular business risk, if the parent company determines that the premiums it pays to the captive insurance company are sufficiently deductible; or that the insurance the captive insurance company provides is more affordable or offers better coverage. 

Captive insurance companies are insurance companies established by a parent group or group which specific objectives of covering the risks to which the parent is exposed.Hence the use of such companies constitute a type of self insurance , as the companies are wholly owned and controlled by it's insureds , which seems to be an alternative form of risk management more practical and popular means through which the companies can protect them self financially while having more control over how they are insured.

Best wishes.

It is a great Risk Management by what we call Self-Insurance; Where has the Parent of a group of companies is to establish a way to protect it`s business through establishing other insurance companies. In this case, insurance companies is to serve to mitigate the risk of the parent company as a type of the Risk Management. This is  what we call  Captive Insurance .  Thank You for the invitation .

When, a large company or group of companies, in order to cover the risk of its own operation or its group companies, establishes a separate insurance company, is called captive insurance.

thanks for the invitation and information :)

Good answer from Mr.Wasim. I have nothing more to add.