22% of Marsh captives write some form of third-party coverage

In 2018, 22 percent of captives managed by  Marsh were writing some form of third party coverage, with a value of $18.7 billion in premium.

This is according to Marsh’s 2019 Captive Landscape Report, which showed that the number of Marsh-managed captives writing third-party business increased 62 percent between 2014 and 2018, with a 12 percent year-on-year over five years growth in this area.

A lot of companies are adding additiona lines of business into their captives and offering coverage to third parties, for example extended warranties, auto liability and independent contractor risks.

In the past five years, the number of captives offering extended warranties has grown by 22 percent. Extended warranties may be offered by retailers or manufacturers on products such as household appliances, electrical goods, and automobiles.

Independent contractor and customer risks - another third-party risk captives can offer - saw a 138 percent increase in the number of Marsh-managed captives writing it between 2014 and 2018. A construction company might offer general or professional liability insurance to contractors, vendors or independent contractors.

Auto liability, where a manufacturer might offer personal auto liability to its contractors through a captive - generated over $1.2 billion of net premiums for captives in 2018.

In the past five years, the number of captives offering extended warranties has grown by 22 percent. Extended warranties may be offered by retailers or manufacturers on products such as household appliances, electrical goods, and automobiles.

“More risk professionals today are embracing captives as a tool to secure their organisation’s futures, whether it’s generating profits by underwriting third-party risks, accessing reinsurance, or providing cost efficiencies, ” said Ellen Charnley, president of Marsh Captive Solutions. “No matter the structure or premium volume, captives offer flexibility to access and protect capital, accelerate business objectives, and facilitate the funding of programs that promote employee health, well-being, and safety.”