Rachel Seale, consulting actuary with Milliman, says while captive insurance companies are most often used to insure traditional exposures and insurance risks, they can also be used to insure just about any risk to which a parent company is exposed. For example, there are new and emerging risks such as cyber and technology risks and there are risks that are unique to a specific company or industry as well as low-frequency risks and high-severity risks.

Two key issues come to mind when a company is considering insuring unique risks in a captive. The first is policies' forms and definitions, and the second is how to calculate an adequate premium for this unique risk for traditional types of insurance.

Although there may be challenges with placing unique or hard-to-place risks in a captive, depending on the situation, a captive may be a very good option.