30 January 2017Analysis

Luxembourg and Ireland are leading domiciles in Solvency II area in 2017

The European Union and associates countries’ total number of captives stood at 582 in January 2017, with more than a third domiciled in Luxembourg and over 100 in Ireland.

Other European countries with captive markets regulated by Solvency II, such as Sweden, Switzerland and Malta, followed with a few dozen of corporate insurers and reinsurance each.

The findings came from a new directory of captives subject to Solvency II and their parent companies.

Ireland was found to attract an above-average number of pharmaceutical, services and automotive captives, while Sweden is the only territory hosting captives of public bodies.

Nine out of ten Solvency II captive owners were located in the European Economic Area or Switzerland.

"Although most owners prefer to remain discrete about their insurance activities, we could identify more than nine out of ten owners of active captives." says Martin Winkel, insurance analyst and editor of the directory.

“This 'who is who in captives' will help companies in better understanding the dynamics of a changing market and in identifying new business opportunities.”

The directory suggested that many captives and their owners are currently concerned with the increased costs from Solvency II and the OECD’s project on Base Erosion and Profit Shifting (BEPS).

Runoff specialists are becoming increasingly interested in this market segment, as smaller carriers are finding it increasingly difficult to operate in a cost-efficient way.

At least 360 captives since 2000 have gone into runoff, being merged, moved, sold or dissolved in the Solvency II area, most notably in Luxembourg, the directory stated.

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