What does Captive Value Added mean? Read on to discover the definition & meaning of the term Captive Value Added - to help you better understand the language used in insurance policies.
Captive Value Added
The financial benefit to an organization resulting from participation in a captive program as a shareholder and/or an insured. One formulaic approach to calculating CVA uses net present value (NPV) program cost comparisons to show a captive's contribution to an organization's retention ability that is, the capacity creation effect as well as the lower after-tax cost, compared to self-insurance or commercial insurance. The "value added" approach can also be used to recognize subjective as well as objective benefits.
We hope the you have a better understanding of the meaning of Captive Value Added.