Captive insurance allows organizations to create a licensed insurer, onshore or offshore, to manage risk and counter rising premiums. As a form of discounted capital, a captive pays claims using accumulated premiums until that capital is exhausted. Assessing balance sheet risk tolerance is essential, as companies must understand how claims losses impact financial stability. By retaining predictable losses through a captive, businesses can offset inflation‑driven premium increases, gain greater control over their insurance spend and better align risk financing with long‑term strategic goals.

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