4 July 2023Analysis

Marsh: captive premium growth up

Captive premium growth has continued to rise, according to a new report out from broker Marsh.

Marsh said that in all regions, captive premium growth over the past two years continued to trend upward. Even mature captive markets, such as Europe and the island domiciles, have seen growth.

In North America, premiums for captives with North America-based parents were up 15%, while the major island domiciles of Bermuda, Cayman Islands, and Barbados have collectively seen premiums grow by 11%.

In Europe, Guernsey and Luxembourg, two leading European domiciles, have seen premium growth of 13% and 36%, respectively.

In Asia, captives with Asia-based parents wrote 58% more premium and in Latin America premiums among captives with parents based in Latin America grew 36%.

Historically, captive growth has occurred during periods of rising commercial insurance pricing as buyers retain more risk. However, even as rate increases began to slow for certain lines of business and regions, captives continued to grow — a trend Marsh foresees continuing.

According to the Marsh report: “The use of captive insurers is growing across the board. As risk-funding vehicles that offer numerous advantages, interest in using captives is higher than ever.

“In the past three years, Marsh clients formed nearly 400 new captive entities. Globally, Marsh Captive Solutions now manages approximately 1,900 captives and other entities across 55 domiciles — that equates to one in every four captives. Premium volume of Marsh-managed captives has topped $70 billion, with surplus of almost $120 billion.”