The adoption rate of international employee benefits programmes reinsured by captives is accelerating, while Aon hopes its new cell option for EB will widen accessibility further.
Captive Intelligence reported last week that Aon had launched its Employee Benefits Cell Captive facility, allowing insureds to reinsure a global benefits programme through a protected cell within one of Aon’s White Rock cell companies.
Speaking in an exclusive interview on the Global Captive Podcast Sven Roelandt, global leader for EB financing strategies at Aon, and Ciaran McCabe, strategy & delivery leader at Aon’s White Rock Group, explained why they had launched the facility and the impact they hope it can have.
Roelandt said international employee benefits premium reinsured by pure captives is now “significantly north” of €3bn.
Aon collects the information through its annual Employee Benefits Network Survey and added that reinsurance to a captive programme for EB had now overtaken multinational pooling.
“Premium captured by EB captive programmes have been increasing by around 20% year-on-year for the last five years and it’s a similar story when looking at the number of EB programmes,” Roelandt said.
“Today, the industry recognises there are, give or take, around 175 multinational companies reinsuring their EB programme to their captive. With the first programme emerging in the mid 90s, this means an average adoption rate of five to six programmes a year.
“Actually in 2023, the market has seen 20 programmes emerge, and 2024 even topped that number.
“Just at Aon for 2025, we already now have five clients that will move to a captive strategy in the course of this year, and we’re only in early March.”
McCabe hopes that providing the cell option will help make EB captive financing more accessible to a wider group of corporations.
“There is a couple of aspects of the approach that we’re looking to take that we feel can really drive increased penetration in the EB captive space,” he said on the podcast.
“The first is affordability. All of the advantages that we’re familiar with the PCC structure in terms of the lower cost base will equally apply to an EB structure.
“Secondly, one of the traditional barriers to the growth of EB captives for smaller programmes has just been difficulties in generating sufficient premium volume with any one EB network to make a captive programme financially viable.
“What we have sought to do is take a portfolio wide approach through the PCC structure, working, as Sven mentioned, in close collaboration with the networks.
“And through that approach, we think we can lower that barrier to entry and help clients with smaller programmes access this type of structure and realise the financial and strategic benefits of an EB captive solution.”
As with more traditional uses of cell captives for property and casualty programmes, Roelandt and McCabe believe it can also be a pathway towards a single parent captive for clients.
McCabe described that tried and tested strategy on the P&C side as the “stepping stone” approach for clients.
“Within our existing PCC portfolio, we very often support clients who want to graduate from the PCC into a fully-owned captive once they’ve built up sufficient scale and experience of operating a self-insured structure,” he added.
“We have a tried and tested approach to converting cells into captives and the different ways of achieving this.”
While Aon owns White Rock protected cell companies in multiple domiciles across Europe, offshore and the United States, it has established a dedicated White Rock Employee Benefits PCC in the Isle of Man, which it intends to focus exclusively on EB business.
With regards to why Aon chose the Isle of Man for this vehicle, McCabe added: “ Aon has a longstanding presence in the Isle of Man, as does the general captive market.
“They have a well-regarded risk-based approach to solvency and a proportionate regulatory approach that recognises the unique features of captives and PCC structures. We felt it was the ideal home for this new initiative.”