The Arizona Department of Insurance and Financial Institutions (DIFI) licensed 12 new captive insurance companies in Arizona in 2020.
It means that as at the end of 2020 Arizona had 131 captives in the state, including 110 pure captives, 23 pure reinsurance captives, 10 risk retention groups, four industry group captives, five protected cells and 2 association captives.
Broken down by sector, 32 of Arizona’s captives are owned by financial and insurance companies, while 24 are owned by companies in the healthcare and social assistance industry. Other industries include construction, manufacturing, transportation and warehousing and retail.
Meanwhile, Arizona saw nine captives close down in 2020.
In 2019 Arizona licensed nine new captives and five license terminations.
Vincent Gosz, chief captive analyst at the Arizona DIFI, said 2020 had been an active year for the Arizona captive programme. “With the effects of the pandemic, emerging and evolving risks like cyber, and the hardening commercial insurance market, we saw significant activity in new formations, changes in business plans, including new lines, changing limits and retentions, and other requests, along with some attrition as some entities merged or retrenched,” he said.
He predicted 2021 will see continued growth in the captive market. “Many of the same challenges remain and the usefulness of a captive seems pretty clear,” he said.
Arizona Department of Insurance and Financial Institutions, Vincent Gosz