In this GCP Short, produced in partnership with Guy Carpenter, Richard takes a closer look at the surge in group captive business in the United States.
Naturally on GCP we do tend to focus more on pure captives and even captive cell utilisation, but the growth in group captives, particularly in the United States, has been huge in recent year.
The US market brings large groups of mid market or smaller companies together to insure an increasing range of lines such as workers’ comp, auto, property and various liability coverages, and is opening up the captive concept to a huge pool of insureds.
Richard is joined by Rob Collins, Captive Segment Leader and Managing Director at Guy Carpenter, and Linda Johnson, Executive Vice President and Chief Underwriting Officer at Old Republic Risk Management.
Our two guests provide services to group captives across the US, and they share their views on why we are seeing such growth in this area, what is driving some of the new trends, and how to tackle certain challenges such as fronting, legacy management and reinsurance.
Nazri Wong, Head of Commercial Operations at Brighton Management Limited.
Parametric insurance can play a valuable supporting role when traditional policies fall short, according to Nazri Wong, Head of Commercial Operations at Brighton Management Limited, a LECA1 rated Insurance Manager in Labuan IBFC.
There’s something frustrating about watching a loss unfold, knowing the damage is real but the policy might be worded otherwise. Maybe it’s a supply chain disruption triggered by a flood that didn’t quite breach the warehouse or a power outage that lasted just short of the deductible threshold. These aren’t rare events; they happen all the time. When they occur, traditional indemnity policies can leave a business exposed. This is where parametric insurance comes in.
Parametric insurance is designed for that space in between. It doesn’t aim to replace traditional cover but instead, adds structure to grey areas. For captives, which are already built to respond with flexibility, parametric solutions offer a practical way to strengthen risk programmes and provide faster, more targeted support.
What is Parametric Insurance?
Parametric insurance works differently from traditional indemnity cover. It’s based on objective, predefined triggers such as wind speed, rainfall, temperature, or seismic intensity. It’s a simple idea with powerful implications. Imagine a policy that responds the moment a Category 3 cyclone is recorded, or when rainfall exceeds 300mm in a single day. Once the agreed threshold is met, payment is made. This is the whole mechanism, in a nutshell. There are no disputes over coverage interpretation or waiting for claims investigations: only a timely, data-driven response.
Of course, parametric insurance isn’t a substitute for traditional coverage and it’s not meant to be. However, it can play a valuable supporting role where traditional policies fall short. Think of losses tied to non-damage business interruption, uncovered perils, or events that sit beneath large deductibles. These are precisely the types of risks that parametric insurance can address.
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For captives, this makes a lot of sense. They have deep visibility into the parent company’s risk profile. They’re structurally close to the operational pain points and have the flexibility to structure solutions that the commercial market may not offer. Parametric coverage gives them one more tool to respond with speed, precision, and purpose.
How Can Captives Use Parametric Insurance?
Captives exist to solve problems the markets can’t always address. They’re closer to the risk, more involved in operational planning and often write coverage that’s narrowly defined or high frequency in nature. That makes them ideal vehicles for parametric solutions.
Instead of waiting for broader market capacity, a captive can design a parametric policy around the organisation’s specific exposures.
Let’s take a closer look via an example. A manufacturing company in Southeast Asia relies on a central warehouse that often gets cut off by flooding. The building itself isn’t damaged, but when the access roads are underwater, shipments are delayed and operations come to a standstill.
The company’s traditional insurance doesn’t cover this kind of loss. The company then uses its captive to set up a parametric policy. If rainfall measured at a nearby weather station exceeds a certain threshold over two consecutive days, the policy pays out. This helps cover the cost of rerouting deliveries or sourcing materials locally so the business can keep moving even when things go sideways.
This kind of approach isn’t just theoretical. When COVID-19 hit, Katoen Natie, a logistics company out of Luxembourg, took a hard blow. Similar to many others in the supply chain world, the company witnessed parts of its network grind to a halt. Lockdowns didn’t just slow things down – they cut off routes, stalled deliveries and forced businesses to shut down. However, as there wasn’t any associated physical damage, traditional policies didn’t cover the losses.
Through its captive, Katoen Natie developed a parametric policy tied to specific triggers, such as government-imposed closures. It gave them quick access to capital during a period of deep uncertainty. The solution wasn’t perfect, but it filled a critical gap. This development demonstrated how captives can respond with speed and precision when the standard market falls short.
In each of these cases, the captive didn’t just mimic what the commercial market was already doing. Instead, it focused on a specific operational pain point, identified data that could be monitored in real time, and built a policy that responded at the right moment.
Captives have always been about flexibility. Parametric insurance just gives them one more way to use it. When designed well, these policies can provide timely support for risks that are otherwise uninsurable or left uncovered. This approach doesn’t aim to replace traditional coverage; rather, it focuses on creating solutions that truly work.
Benefits of Parametric Cover in Captives
Captives are well positioned to take on this role for several key reasons. One is their close alignment with the business, allowing them to engage directly with teams across operations, supply chain, finance, and even regarding ESG matters. This direct access provides captives with a clearer understanding of the actual risks involved, beyond what is reflected in historical loss data. Consequently, they can design policies that align more effectively with the organisation’s operational realities.
Captives have the advantage of agility. Unlike traditional insurers, who may wait years for data and depend on industry benchmarks before providing coverage, captives can swiftly address new or emerging risks. Whether the threat is related to climate change, cyber security, or reputation; a captive can create and implement a parametric policy in months instead of years.
When it comes to basis risk, which is the gap between what triggers a payout and the actual loss, captives tend to handle it differently. Unlike commercial insurers which tend to eliminate this gap entirely, captives may accept a slight mismatch in return for speed, transparency, and alignment with business needs – so long as the overall solution improves resilience.
For example, a captive might write a parametric earthquake cover that pays out when a magnitude 6.0 quake hits within a 50- kilometre radius, even if the actual site isn’t damaged. Why? Because the costs of evacuation, inspection delays, or lost production often follow regardless of physical loss. This may not be a perfect match, but it addresses a very real disruption.
Industries with high exposure to uncontrollable external events have started using this approach more actively. Agriculture is a clear example. Captives supporting farming cooperatives or food producers have utilised satellite data on soil moisture or heatwaves to trigger payouts that help offset crop losses or rising input cost.
In energy, some companies have explored parametric covers for wind speed or wave height to manage downtime in offshore operations. Even in healthcare, parametric policies tied to infectious disease outbreaks have helped captives cover surge costs or revenue drops that fall outside traditional policies. Across all of these examples, what stands out is how captives use their inside knowledge of both insurance and the business itself.
Labuan IBFC: A Strategic Jurisdiction for Captive Innovation
When a company is looking to set up a captive, the choice of jurisdiction isn’t just a box to tick as this decision directly affects how the captive performs and evolves. Labuan International Business and Financial Centre (Labuan IBFC), with its strong regulatory foundation, tax transparency, and specialised service ecosystem, offers a compelling environment for long-term captive success.
Labuan IBFC’s sound and well-established regulation provides the clarity, consistency, and oversight that captive owners need to operate with confidence. It strikes a balance between strong oversight and the flexibility required to support innovation.
Labuan IBFC also provides tax efficiency within a transparent and internationally aligned framework. It complies with global standards on tax and substance, giving businesses the benefits of a low-tax environment without compromising credibility or compliance. This is important, especially in current times when global rules have become more stringent.
Even the most well-structured captive needs the right ecosystem to operate effectively. Labuan IBFC brings together experienced captive managers, reinsurers, advisors, and ancillary service providers to support its captive insurance business. The latter includes company incorporation, trust and corporate secretarial services, and access to professional expertise such as legal, accounting, and tax services. Together they bring practical expertise and technical know-how to every stage of the captive’s lifecycle.
In addition to strong regulation, international tax compliance, and a mature ecosystem, Labuan IBFC offers a diverse range of innovative captive solutions tailored to different risk appetites. These include pure (single-owner) captives, group and association captives, master rent-a-captives (subsidiary rent-a-captives and external rent-a-captive), cell and multi-owner captives, as well as Protected Cell Companies (PCCs). Labuan IBFC is also the only jurisdiction in Asia that provides for the PCC structure within its legislation.
The release of new omnibus guidelines in 2023 marked a significant step forward in captive innovation for the jurisdiction. One of the key updates was the expansion of permissible risks, allowing captives to indirectly underwrite insurance interest risks. This shift gives captives more room to respond to complex, evolving exposures.
The guidelines also clarified the roles and responsibilities of PCCs, rent-a-captives, and other structures, thus making it easier for businesses to navigate setup and compliance.
Altogether, these changes reflect Labuan’s growing depth and capability in supporting more sophisticated and flexible captive arrangements. For companies that seek a forward-looking jurisdiction with both stability and innovation, Labuan IBFC offers a strong foundation to build on.
Jonathan Edwards, Partner, Head of Insurance and Risk, HCR Law
Sophie O’Sullivan, Barrister, Outer Temple Chambers
On 15 July 2025, His Majesty’s Treasury (HMT), alongside the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), announced plans to establish a bespoke regulatory framework for captive insurance, aiming to position the UK as a competitive global hub.[1]
Captive insurance, a self-insurance mechanism where a corporate group creates a wholly owned subsidiary to insure its risks, offers multinationals enhanced control over coverage, pricing and claims, often with tax benefits and cost efficiencies.
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The UK’s current regime, tailored for commercial insurers, is ill-suited for captives due to its high costs, rigidity and lack of tailored provisions. For example, capital requirements, aligned with Solvency II standards (the EU’s regulatory framework for insurance and reinsurance companies) for large insurers, are disproportionately high for captives, which typically insure low-risk, group-specific activities.[2]
HMT’s November 2024 consultation and July 2025 response emphasised the need for a “genuinely competitive, bespoke captive insurance framework” [3] with a broader scope.
With consultations planned for summer 2026 and implementation targeted for mid-2027, the UK must consider global benchmarks in captive insurance like Bermuda, Guernsey, and the Isle of Man to design and implement an ambitious framework that leverages London’s insurance market while addressing industry demands for greater flexibility and proportionality.
Learning from global leaders
To build an ambitious and competitive framework, the UK must look to the structures implemented by leading captive domiciles.
Bermuda, Guernsey, and the Isle of Man dominate the global market, offering tailored environments which balance flexibility, proportionality, and oversight. Bermuda, one of the world’s leading captive hubs with over 600 captives in 2024,[4] uses a class-based capital system that lowers requirements for captives and imposes zero corporation tax. Importantly while the jurisdiction enjoys Solvency II equivalence for its commercial insurers, the captive classes are not impacted. This enables captives to underwrite diverse risks, including third-party business, allowing efficient risk pooling and coverage for related entities.
Guernsey, Europe’s largest captive domicile with over 200 captives[5], pioneered the Protected Cell Company (PCC) model, which enabled smaller firms to pool risks cost-effectively within a single legal structure. Its risk-based regulation and competitive tax regime support direct-writing captives that underwrite risks in the UK and beyond.
The Isle of Man emphasises proportionality, with variable capital requirements tied to business plans and support for PCCs, which are further bolstered by a favourable tax environment.
Ireland, Malta, and Vermont offer further insights. Ireland’s Solvency II-compliant framework, with a 12.5% corporation tax, benefits from EU market access. Malta’s 35% standard corporation tax is offset by refunds, and its PCC support enhances EU competitiveness.
Vermont, the leading US captive jurisdiction, offers a business-friendly, risk-based approach and exempts premiums from corporation income tax, making it a model for flexibility.
These jurisdictions share flexible capital requirements, proportional regulation, competitive tax structures, and innovative frameworks. In our view, the UK must adopt these elements whilst leveraging London’s status as Europe’s largest insurance market.
The UK’s opportunity: key pillars of an ambitious framework
HMT’s July 2025 consultation response emphasises the need for a broader scope, which would allow for a wider range of firms and risks, proportionate capital and reporting requirements, faster authorizations, and PCC support.[6]
In our view, an ambitious UK framework should rest on four pillars: (1) flexible underwriting, (2) proportionate regulation, (3) competitive taxation, and (4) innovative structures.
1. Flexible underwriting: direct writing and expanded risks
The UK must decide whether captives can write direct insurance or be limited to reinsurance. Direct-writing captives, which underwrite risks directly for the parent or related entities, reduce reliance on costly fronting arrangements.
Bermuda and Guernsey permit direct writing, enhancing their appeal. HMT’s response distinguishes between direct writing and reinsurance captives, but excludes direct writing of compulsory lines (e.g., motor third-party liability). An ambitious framework would fully embrace direct writing captives for non-compulsory lines, thereby minimising fronting costs for multinationals with complex risks.
HMT also stated its support for broader risk eligibility, which could include third-party risks like insuring franchises or supply chains, and allowing financial services firms to establish captives for limited purposes (e.g., first-party risks like property damage).
Bermuda’s model permits third-party underwriting, fostering innovation. The UK should allow limited third-party risks, with regulatory safeguards, to attract diverse captives while aligning with industry demands for flexibility.
The UK’s current framework imposes high capital and compliance costs, deterring captives. HMT’s response advocates proportionately lower capital and reporting requirements and faster authorisations.
Bermuda’s class-based system and Guernsey’s risk-based supervision tailor requirements to captives’ risk profiles. The UK should adopt a tiered, risk-based approach, with lower capital for captives insuring low-risk group activities and higher thresholds for third-party or complex risks.
The Isle of Man’s efficient licensing and Guernsey’s streamlined approvals set a high standard. The PRA/FCA’s planned 2026 consultations should prioritise a fast-track authorisation process for straightforward captives, maintaining Solvency II equivalence for EU market access. This aligns with HMT’s ‘no new legislation’ stance, ensuring swift implementation by mid-2027.
Taxation is often a factor in domicile decisions and HMT’s call for a “genuinely competitive”[7] framework suggests tax reform openness.
Bermuda’s zero corporation tax, Vermont’s premium tax exemption, and Guernsey’s competitive regime attract captives. The UK’s 25% corporation tax (2025) is less competitive than Ireland’s 12.5%. To compete, the UK could exempt captive premiums from corporate income tax or offer reserve deductions, mirroring Vermont. Malta’s refundable 35% standard tax model also shows that flexibility enhances competitiveness.
Targeted relief for captives insuring group risks could make the UK a viable alternative to offshore hubs, leveraging proximity to the London insurance market.
4. Innovative structures: prioritising PCCs
HMT’s response and concurrent July 2025 Insurance Linked Securities and PCC consultation emphasise PCCs, which allow multiple entities to pool risks within a ring-fenced legal structure.
Guernsey’s PCC model lowers entry barriers for smaller firms.[8] The UK’s framework should streamline PCC setup and governance, as proposed in the July 2025 consultation, despite requiring legislative changes. This aligns with industry feedback for broader firm eligibility, including smaller companies.
Beyond PCCs, the UK could explore Incorporated Cell Companies (ICCs) for risks like cyber, D&O or climate events, as seen in Bermuda. Such innovations would differentiate the UK and attract forward-thinking multinationals.
Challenges and considerations
Balancing competitiveness with stability is critical. Overly lax regulation risks undermining the UK’s financial reputation, while excessive caution could continue to drive captives to Bermuda, Guernsey or elsewhere.
HMT’s response and the PRA/FCA’s statement emphasise pace, but the 2026–2027 timeline requires careful calibration to avoid rushed compromises.
Excluding compulsory lines for direct writing is prudent, but restricting third-party risks too tightly may limit appeal.
Conclusion: seizing the opportunity
An ambitious UK captive framework must combine flexible underwriting, proportionate regulation, competitive taxation, and innovative structures to rival its global competitors. By permitting direct writing captives for non-compulsory lines, allowing limited third-party risks, adopting risk-based regulation, offering tax incentives, and prioritising PCCs, the UK can attract high-value captive business.
A bold approach could redefine the UK’s role in global captive insurance, but timidity risks losing ground to established domiciles. Leveraging London’s insurance market, the FCA and PRA have a unique opportunity to create a bespoke regime by mid-2027, which balances competitiveness with stability.
WTW expects to manage up to five captives in France by the end of the year, according to Edwina Leclere, associate director of captives and insurance management solutions for France.
WTW appointed Leclere in May to lead growth in the region and establish a captive management team based in Paris.
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Josh Cryer is an experienced risk and insurance manager for major corporates. Previous to this, he was a broker in the London market servicing and managing large multinational programmes.
Alternative Risk Transfer (ART) is all the rage. It has become difficult to find a captive industry event that does not have a panel debate or roundtable focussed, at least in part, on ART.
New specialist ART brokers and (re)insurers are forming in anticipation of growing demand and the established brokers and (re)insurers are heavily investing in their respective ART teams and marketing budgets.
Most importantly, risk managers are pushing the boundaries in this space, exemplified by the formation of independent corporate working groups – demonstrating that ART is no longer a fringe topic… but why?
The simple answer is that ART is becoming a necessity rather than a “nice to have”.
Though the definition of ART is both ambiguous and wide ranging in its very nature, at its core it refers to methods of transferring, financing and retaining risks outside of the traditional (re)insurance markets, some of which we will explore in more detail.
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Many ART solutions have been available for a considerable amount of time but have been substantially underutilised – until now.
The rise of captives and structured risk solutions
There is a strong correlation between the growing popularity of ART solutions and the increasing use of captives, both through new formations and more strategic use by existing owners. Having a captive provides the owner much greater strategic agility. It is increasingly becoming integral to a captive owner’s overall enterprise risk and (re)insurance strategy.
It’s undeniable that a key factor in the shift in mentality is attributed to the increasing volatility of the traditional (re)insurance markets in recent years, particularly during and post Covid, when capacity became very constrained and/or prices increased dramatically.
This was particularly evident in certain classes of business such as property (natural catastrophe), cyber and D&O.
For many corporates, the sharp rate increases, and rapid removal of coverages forced them into rethinking their (re)insurance strategies. The result has been a fundamental shift in mindset.
Another key factor is the increasingly complex and connected risk landscape that captive owners operate within. Captive owners are waking up to the fact that no longer will they be able to continue to maintain status quo (re)insurance strategies of purchasing products on a mono-line, annual basis at increasing prices, if they wish to respond efficiently and effectively to the challenges being presented.
The requirement is now to take a more enterprise view to build tailored solutions that create longer term value.
One of the key tools in the ART toolbox available to captive owners which are well equipped to combat these challenges are structured risk solutions.
Typically, these are either multi-line or multi-year transactions or a combination of both, which achieve diversifications across time and class. They provide each loss or aggregate protection to captives in an individualised and bespoke manner.
It is the diversification of risk across both time and class that enables captive owners to respond to the challenges presented. Diversification enables captive owners to smooth volatility and transfer/finance risks which may be too complex or connected for the traditional (re)insurance markets.
In traditional (re)insurance purchasing strategies this key value is forgiven to the market through the purchasing of (re)insurance on a per class of business and annually renewable basis.
Why hasn’t ART been more widely adopted… yet
The individualised and bespoke nature of these transactions has contributed to their lack of widespread adoption to date.
For many captive owners, these solutions were misunderstood and perceived only to be appropriate for mature, sophisticated and well capitalised captives. A misconception that was inadvertently (or purposefully in some cases) exacerbated by the lack of investment in ART talent/teams and solutions within both brokers and (re)insurers.
Too often, these structured risk solutions were viewed as short-terms responses to hard markets rather than long-term strategic tools. Aside from a few experts who have been championing these solutions for years, the industry has had difficulty articulating the substantial benefits these solutions provide in a concise, clear and consistent manner, most importantly which could be easily understood by captive owners.
It is fair to say these solutions were viewed more of a “nice to have” than a necessity.
The common misconceptions and lack of investments are changing and changing rapidly. As a former risk manager, I experienced this shift firsthand.
In 2022, as a direct response to the rapid hardening of the cyber market and faced with the real possibility of being unable to obtain the necessary coverage, my previous company formed a newly incorporated captive.
It was evident whilst undertaking the feasibility study, in advance of the formation of the captive, that diversification of risk across time and class was key to its long-term success. This approach was not possible without the use of a structured risk solution from day one, in the form of an annual stop loss aggregate policy (multi-line).
Most importantly, it enabled the corporate to stay within its risk appetite, and exchange (for a fixed cost), the unwanted aggregate financial volatility, whilst at the same time being able to retain meaningful amounts of risk across numerous classes. The result was a significant reduction in the overall Total Cost of Risk.
Maximising the benefits of ART solutions
As captives mature, the risk financing strategies must evolve. The short-term nature of purchasing traditional (re)insurance is both inefficient and leads corporates to face greater susceptibility to volatility.
The rapid pace of change in the risk landscape requires the implementation of a longer term (and enterprise-wide) approach to risk financing/transfer if capital requirements are going to be met going forward.
Maximising capital & operational efficiencies and closer alignment with a wider enterprise risk management framework are key aims of most captive owners. A multi-line, multi-year structured risk solution achieves this.
It unlocks many economic and operational benefits. It better aligns risk with capital, avoiding unnecessary premium leakage and the ability to retain more underwriting profits. To maximise the success of these solutions there is accountability on the captive owner.
It requires them to take a holistic, data driven approach to risk financing, one that is very closely aligned with the wider enterprise risk management and corporate strategy. It is very unlikely that a partnership with a capital provider will be successful unless these are clearly evident.
Despite common misconceptions, the benefits of these solutions are confirmed and compounded even further when a large loss occurs.
Taking a longer-term approach provides the captive owner greater budgetary stability as they are able maintain control over the pricing and coverages provided. It removes the potential uncertainty of a sharp correction in premium or the removal or restriction of coverages, which are both present in any traditional annual (re)insurance transaction, following a large loss.
This has been corroborated by several experienced captive owners who have adopted these structured risk solutions for a sustained number of years in both softer and harder markets.
An expanding ART toolbox
Parametric insurance, catastrophe bonds, insurance linked securities and loss portfolio transfers are just a few other ART tools at the disposal of captive owners. Each of these solutions enables even greater flexibility and adaptability.
As strategies evolve, investments by brokers/(re)insurers continue and alternative forms of capital is attracted to participate, it is highly likely that these solutions will continue to rise in prominence and use over the longer term.
The increasingly complex and connected risk landscape within which businesses operate within is becoming the norm not the exception. It will continue to necessitate the use of these financial solutions as traditional sources of capital will no longer be efficient or sufficient.
The rhetoric from key industry leaders continues to back this up. Aon CEO Greg Case recently told the Financial Times “If we don’t bring in a trillion dollars of alternative capital in the next decade, we’ve failed.”
No longer are ART solutions a nice to have, they are a necessity.
CIC Services has appointed Jake Ridgway as VP of people operations, where he will lead HR and operations to support organisational effectiveness, enhance company culture, and ensure company alignment with CIC Services’ objectives.
Tennessee-based CIC Services is a captive manager that serves middle-market companies.
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AM Best has revised the outlooks to negative from stable and affirmed the financial strength rating of A- (excellent) and the long-term Issuer credit rating of “a-” (excellent) of Vermont-domiciled Agrinational Insurance Company.
Agrinantional is owned by Archer Daniels Midland Company (ADM), an American agricultural processor and food ingredient provider.
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Texas-based INTX Insurance Software has launched in North America, following 20 years of providing insurance solutions to clients in the United Kingdom, Europe, the Caribbean, Bermuda and Africa.
The INTX solution offers end-to-end property and casualty policy administration to carriers, reinsurers, MGAs, and captives.
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The Oklahoma Captive Insurance Association (OCIA) has appointed a new leadership team following its elections, which sees Renea Louis of Sotera Global Management, appointed as president and chairwoman, while Matt Moore, of CamGen Partners, was elected as VP and vice chairman.
Angela Ables of Kerr, Irvine, Rhodes & Ables, was also re-elected as secretary, while Blake Kerr of Helio Risk, has been newly elected to the OCIA board of directors, where each will serve a three-year term.
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Property remains a key driver of captive utilisation in 2025 and is expected to continue as insureds use a variety of programme structures.
Speaking on the latest episode of the Global Captive Podcast Adriana Scherzinger, global head of captives at Zurich, was joined by Ian Ascher, executive director for global risk management at Jones Lang LaSalle, Sandy Bigglestone, deputy commissioner for captive insurance at the State of Vermont, and Michael Serricchio, US & Canada regional leader at Marsh Captive Solutions.
The guests recreated the panel they produced for the RISKWORLD conference in Chicago in May, which addressed the drivers of insuring property through captives, how to design an appropriate programme, and the importance of understanding the risk appetite of the group.
“Property insurance is a great fit for captives, especially as companies look for stability and control,” Scherzinger said.
“And captives offer organisations a real advantage, right? The long-term pricing and stability, the ability to keep underwriting profits, the stronger risk management, plus access to reinsurance, and robust governance.
“And even as the commercial property market shows signs of moderation, we are seeing more companies use captives to retain greater risk and prepare also for the unexpected, from natural catastrophes to geopolitical unrest.”
Serricchio said that property is the number one line of coverage written by Marsh’s global portfolio of captives, with around $7.7bn of premium in 2024.
From 2023 to 2024, there was a 10% increase in property premiums running through Marsh captives, while from 2022 to 2023 there was a 29% increase.
“These are huge numbers,” Serricchio said. ”These are multinational corporations, large organisations that are writing all types of property lines in their captives.
“That could be deductibles, it could be quota share, it could be ventilated layers in the programme, shared layers in terms of taking premium out of the market and having the wherewithal and the ability to put that line of coverage or that layer into your captive for some premium savings.”
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Jones Lang LaSalle is a global real estate firm, generating around $20bn in annual revenue.
Ascher explained that the company has developed a more globalised structure, which has helped evolve and improve its captive strategy.
He said that the challenging commercial property insurance market was becoming unsustainable, especially as the firm often required low deductibles to meet certain lender requirements.
“So we ended up increasing our deductible through our captive, while still allowing for a lower deductible at the business unit level and to comply with contractual requirements,” Ascher explained.
“It was really the difficult commercial market that that led us there, but also maturing as an organisation led us to the strategy.”
In Vermont, the largest captive domicile in the world, Bigglestone said that they are seeing increasing property premiums across their captives.
“With respect to property placements, Vermont has captives increasing retentions almost at a rapid pace,” Bigglestone said. “And sometimes those retentions are forced retentions.
“The company owning the captive doesn’t have a choice because it’s cost prohibitive or just not being offered in certain layers of their property tower. So expansion of current business plans beyond typical casualty lines is what we’re seeing.
“The property market and geographical cross-subsidization has driven the formation of more captives as well. We see many of these companies with very good loss histories and a solid commitment to risk control making the company a better than average prospect for captive usage.
“These increases are seen across almost all industry sectors here in Vermont, with property being more prominent in new formations within the real estate industry sector.”
Listen to the full discussion on the latest episode of the Global Captive Podcast here, or on any podcast platform. Just search for ‘Global Captive Podcast’.
