Construction captive utilisation increases as insureds look to nullify rising costs

• From 2016 to 2022, commercial market saw rate increases of 100% – 300%
• Complexity of engineering risks leads insured to start with traditional property policies in their captives
• Group captives the most common captive structures for construction companies in the US
• Construction captives are frequently used for writing the primary layer of risk

The use of captives in the construction and engineering market is proliferating, as contractors look to battle rising costs and limited capacity for particular risks, during a prolonged hard market.

The last few years have presented a challenging environment across the construction and engineering sectors, with rates increasing significantly since 2018.