PIC/Captive/Small Insurance Company History
Current PIC count (worldwide): 5,000+
Self-Insurance (the first captive-type structure)
The first captive-type structure appears in literature published in 1874, 1918, and the 1920′s. Since then, the self-insurance/alternative risk financing vehicle has continually evolved to meet the ever-changing demands of the corporate environment. Source: Lexic.us
The term “captive” comes from the “father of captive insurance,” Frederic M Reiss, who coined the term while he was bringing his concept into practice for an industrial client in Ohio in the 1950s. The term “captive” came to Reiss when working with his first client, the Youngstown Sheet & Tube Company. The company had a series of mining operations and its management referred to the mines whose output was put solely to the corporation’s use as captive mines. When Reiss helped the company incorporate its own insurance subsidiaries, they were referred to as captive insurance companies because they wrote insurance exclusively for the captive mines. Reiss continued to use the term for his concept, and both the captive and the term have adopted a far wider context. The term also made sense as the policyholder owns the insurance company, i.e., the insurer is captive to the policyholder. If the captive insures only its parent and affiliates, it is called a pure captive.