27 October 2014Actuarial & underwriting

Captives high on agenda for European risk managers

The use of captives in Europe continues to increase, with 30 percent of all European risk managers, owners and non-owners of captives, planning to establish or expand use of a captive.

This is according to FERMA’s Risk Management Benchmarking Survey, which added that 33 percent of those who use a captive plan on increasing their involvement over the next two years for traditional lines of cover, and 41 percent for non-traditional lines.

“Of 39 percent of the respondents who own or use a captive, many expect to use it more over the next two years: 39 percent for non-traditional lines of cover and 33 percent for traditional lines,” said the report.

According to captive owners, future interest in captives will differ under Solvency II. If an organisation does not own a captive yet, 77 percent of current captive owners responded that Solvency II will decrease its interest to create one due to heavier rules and requirements.

“But if an organisation does already own a captive, involvement of this captive in the next two years will increase or at least stay identical (94 percent for traditional lines of cover, 80 percent for non-traditional lines of cover),” said the report.