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(RE)INSURANCE CAPTIVES, EFFICIENCY AND MORAL HAZARD. AN ATTRACTIVE MANNER OF RISK FINANCING AND RISK MANAGEMENT FOR COMPANIES IN CERTAIN CIRCUMSTANCES

Wim Weterings

DOI: 10.22495/rgcv4i1art1

Abstract

In this study the contribution is intended to provide more clarity and to demonstrate that under certain circumstances an insurance captive can have important efficiency effects and, among other things, a positive effect on moral hazard and adverse selection. For the purpose of acquiring more information on insurance captives and their operation, literature research was augmented by interviews conducted with the director of an insurance captive of a Dutch multinational, as well as with representatives from AON and Marsh, two major insurance brokers/consultancy firms in risk management that are often involved in the establishment and management of a captive.

Keywords: Reinsurance, Moral Hazard, Risk Management

How to cite this paper: Weterings, W. (2014). (Re)insurance captives, efficiency and moral hazard. An attractive manner of risk financing and risk management for companies in certain circumstances. Risk governance & control: financial markets & institutions, 4(1), 7-15. doi:10.22495/rgcv4i1art1

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