Hawaii is anticipating further growth in captives owned by large Japanese manufactures, according to Paul Shimomoto, chair of the Hawaii Captive Insurance Council (HCIC), and partner at Hawaii law firm Goodsill.
Japanese companies, particularly those with a US business presence, have a strong affinity for Hawaii, viewing it as an attractive and reputable domicile for their captives.
According to CI Datahub, 28% of Japanese captives worldwide are domiciled in Hawaii, followed by Labuan with 20%.
Speaking on the latest episode of the Global Captive Podcast, Shimomoto said Hawaii is seeing continued interest from Japanese companies, particularly from the life sciences and health technology sectors.
Hawaii has long-positioned itself as the go-to captive domicile for Japanese corporates, including regular visits to Japan organised by HCIC, and Shimomoto is cautiously optimistic this could be another opportunity for the captive concept to gain greater traction.
The last visit by HCIC was in April when it sent a small delegation ton meet with the four major fronting companies in Tokyo.
”What’s becoming very obvious is that there’s not enough capacity in the market for the Japanese commercial insurers and they are quickly realising that their customers need more coverage, they need more capacity,” Shimomoto said.
“They can’t get it through the commercial market, so the only place they can really turn is to themselves. So we’re cautiously optimistic that perhaps this is the ‘over the hump’ moment for us with Japanese companies.
“We’ve heard from the fronting companies that because of these capacity shortages that their phones are ringing off the hook with queries about captives.”
Also speaking on the GCP Short, Matt Takamine, captive practice leader at Brown & Brown, said that capacity is shrinking, and it is likely to worsen with consolidation in the Japanese insurance industry — by 2027, there is expected to be only three major carriers.
“Hawaii is extremely well positioned, having had the HCIC active there for 20 years providing captive education and outreach,” he said. “Overall, I think we’re in good shape.”
Takamine added that right now is the golden age of captives, “and you really see that in the globalisation of alternative risk which is amazing to be a part of”.
“Hawaii needs to remain competitive, and Paul and I work closely with the State of Hawaii and the HCIC to ensure that our laws are as strong as possible for both current and prospective captive owners,” he said.
Listen to the full discussion on Hawaii’s captive market on the latest episode of the Global Captive Podcast here, or on any podcast platform. Just search for ‘Global Captive Podcast’.
