Captives zur Absicherung von Extremrisiken? Eine Untersuchung am Beispiel der OIL Insurance Limited

The use of captive insurance companies (captives) is quite common among big and international companies. Generally, captives are used to insure against high frequency/low severity risks. However, we can find captives which have been founded to deal with extreme risks as well. An example is the OIL Insurance Limited (OIL Insurance). In this context, we examine from a theoretical perspective whether captives are suitable for insurance against catastrophe risks. We show that regarding actuarial aspects captives have advantages in comparison to internal self-insurance and disadvantages in comparison to external insurance. The foundation of industry captives through the association of several companies can solve some of the problems, but further criteria especially costs have to be considered. Based on the developed arguments, we analyse whether our case example OIL Insurance is an appropriate instrument to transfer extreme risks.