captive value added (CVA)
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
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.