Captive Value Added (CVA)

When companies get really big, they start thinking about making other little companies (that they still own in entirety, or course, because profits).

A common one is thinking about making their own insurance company, or a “captive insurance company.” It’s genius: they get to insure themselves just as they’d like, and they get any profits from it at the same time. Having their cake and eating it too.

Captive Value Added is the money they’d make if they made a captive insurance company. It’s the dollar figure that has them mulling over the dream of making a captive insurance company.