Tuesday, May 21, 2024

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Property the fastest growing captive line for Marsh

Property is now the fastest growing line of insurance written by captives managed by Marsh, with 29% more captives under management insuring the volatile line compared to last year.

Speaking at the Marsh Captive Solutions Luncheon at RISKWORLD in San Deigo on 7 May, Americas captive consulting leader Michael Serricchio said clients are responding to the troubled commercial market.

“Property is the number one fastest growing coverage in our captives,” Serricchio said.

“Clients that are writing property are writing limits much higher than they were before, using quota shares and increasing retentions.”

While cyber, D&O and employee benefits all continue to feature prominently in the growth areas for captives, it was property that took the headlines in 2023 and it continues to be an area captives are stepping into.

Pat Donnelly, president of Marsh Specialty & Global Placement, opened the presentation by saying “fatigue” and “frustration” with the commercial market had led to the increased utilisation and innovation within captives.

Donnelly added that the captive manager’s portfolio now writes $73bn in aggregated premium and “frankly, I think we’re just getting started”.

The Marsh Captive Solutions team, led by its president Ellen Charnley, also discussed domicile trends, reinsurance placements, ReadyCell and the launch of Edgware Re, its new Bermuda group captive for cyber.

The poster child for domicile growth in 2023 was Canada with 78% premium growth in Marsh managed captives year-on-year, predominantly led by the emergence of Alberta as an new domicile.

Charnley said it was an “exciting time for Canadian captives, for sure”.

“We are doing a lot of work in Canada bringing captives there,” Serricchio added.

“Canada as a whole, including parent companies based there, are embracing the captive concept. They are tired of the commercial market and taking control of their programmes.  They are doing it in a smart and sensible way.”

Marsh has now formed more than 500 captives over the past four years, with 125 new captives formed in 2023. Including cells, it has 1,900 entities under management.