Benefits of captives harder to see in soft market. (captive insurance)

SOUTHAMPTON, Bermuda - Captives continue to have their uses in a time of soft insurance pricing, but companies may find it more difficult to justify launching a captive for the first time in today's market, risk managers say.

While there may be less expensive risk financing options available, the captives also can deliver a means for a company to provide protection or added value to customers and other third parties, they say.

It also can be valuable as a financial incentive for operating units to improve their loss control.

In addition, a captive eventually may be a viable means to underwrite employee benefits for companies.

But that doesn't mean risk managers would do it all over again today.

"For the captive we have, I'm not sure we would start it again in today's market," said David Burr, assistant vp-risk management for Burlington Northern Santa Fe Corp. of Schaumburg, Ill. "We use it now primarily to enhance value for third parties, and there are probably other ways we can do that. The reason we choose to use the captive at this point in time is that we have an established base of capital built in to the …