Category: Captives & ART · Reviewed by Simon Temme, Account Executive · Last reviewed 2026-06-05
A single parent captive is an insurance company wholly owned by a single non-insurance parent group and writing the insurance (or reinsurance) of that parent group and its subsidiaries only. It is the original captive insurance structure, sometimes called a “pure captive”, and remains the dominant model in the global captive market.
Category: Captives and alternative risk transfer Also known as: Pure captive, Single owner captive Established: Modern form from 1962 (first identifiable single parent captive in Bermuda) Related concepts: Captive insurance company, Group captive, Cell captive
A single parent captive insures only the risks of its parent and related entities. Under the Bermuda classification this is principally a Class 1 captive; under Cayman, Class B(i); under Vermont, a pure captive. The captive is typically established to absorb retentions and aggregate risks of the parent’s operating subsidiaries, with reinsurance arranged at the captive level for the excess.
The “only related-party business” requirement varies by jurisdiction in its precise definition. Most jurisdictions permit a small proportion of unrelated business (e.g., supplier or customer extensions) without losing the pure-captive characterisation. The risk-shifting and risk-distribution tests for US federal tax purposes (under Helvering v Le Gierse 312 US 531 (1941) and the subsequent IRS guidance) require genuine risk transfer; single parent captives must therefore include sufficient subsidiary diversity or external reinsurance to satisfy those tests.
A typical single parent captive of a large UK or European corporate group is domiciled in Guernsey, Bermuda, Isle of Man or Luxembourg (for EU passporting). It writes the parent’s employer’s liability, public liability, property damage, business interruption, motor fleet, professional indemnity and increasingly cyber. Annual gross premium is set actuarially. Underwriting profit accumulates in the captive’s reserves and is available for the parent group’s risk management programme or dividend.
Direct-writing single parent captive (writes the original policies directly to insureds within the group); reinsurance single parent captive (reinsures cover originally written by an authorised fronting insurer to the group). The choice between direct and reinsurance structures turns on regulatory authorisation in the territories where the group operates.
A FTSE 100 mining group’s single parent captive domiciled in Bermuda: writes the group’s global property damage and business interruption insurance with retentions of $25m per occurrence and $50m aggregate; reinsures excess of $50m up to $750m through Lloyd’s and Bermuda subscribers. Underwriting profit, when positive, accrues to the captive and is deployed for the group’s risk financing strategy.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
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