Captives: risk managers lean on self-insurance for emerging risk

Captives are doing more than cutting costs. A poll ahead of Airmic 2026 reveals where risk managers are placing them now.

Key points:
Shift from cost control to emerging risk
Half use captives for hard-to-insure risk
Regulatory scrutiny tops pressures

Half of risk managers are now using captives to insure the risks their commercial insurers won’t take on.

Captives appear to be outgrowing their traditional role as mere cost-cutting vehicles. Instead, the sector is shifting toward innovation; more than a third of risk leaders (36%) now view captives as incubators for emerging, non-traditional risks, while another 14% are actively expanding their existing programmes. 

Half (50%) are using captives selectively for difficult-to-insure risks, while just 7% are cutting back in favour of traditional cover, the survey shows. So even as commercial insurance softens in some lines, buyers are getting choosier with captives rather than returning to the open market. 

Scrutiny and the value of data

A greater role brings tougher oversight. Respondents are most concerned about compliance, with 43% naming tighter regulatory scrutiny and governance requirements as the greatest pressure on captive strategy over the next 12 to 24 months. Changing domicile rules are next, cited by 21%.

What separates a strong from a weak captive comes down to data and alignment. Risk leaders ranked high-quality risk and claims data top (29%), ahead of clear alignment with corporate strategy (21%) and effective use of analytics and technology (21%).

Confidence in the wider market remains steady, with 46% feeling confident or very confident about the next 12 months. Spending priorities are led by AI governance (86%) and cyber resilience (79%), yet 21% rate captives and alternative risk transfer as a leading opportunity to innovate in risk management, second only to AI. 

These results suggest captives are no longer just temporary fixes for a tough insurance market. As traditional prices soften, companies are keeping their hardest risks in house. For risk managers over the next year, the biggest challenge will be upgrading their data and compliance systems to handle these more complex liabilities. 

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