From: Captive International, US Focus 2022

Captives are now firmly on the front-burner for every risk manager, writes Daniel Towle, CICA president.

I believe we may very well look back at this period in time and say it was a turning point for the captive insurance industry. The captive market has grown in significance to where it is getting the attention of more risk managers and business owners. Further, it’s clear the current hard market, increased pricing, less capacity in the commercial market, and the volatility of the financial markets are likely to continue.

Add to this a company’s desire to have greater control over its risk management and we are seeing the “perfect storm” for the captive insurance industry, where captives are firmly on the front-burner for every risk manager.

It is clear the organisations that have not considered captive insurance are missing out.”

Dan Towle, CICA

I experienced the growth spurt in captives that occurred after 9/11 in the early 2000s, but this growth trend is different. It is stronger. This is not companies simply finding a solution to an immediate problem. Captives have become considerably more strategic with a much longer vision.

If the COVID-19 pandemic taught us anything it is to expect the unexpected. It also showed us as an industry the vulnerability and the necessity of having proper insurance coverage. Today, sometimes that coverage can be found only by having a captive insurer. This fact has been magnified by the current market conditions and it is aiding the growth we are seeing.

It is clear the organisations that have not considered captive insurance are missing out and will soon be falling behind their peers that have them.

Improving perceptions

As awareness and the size of the captive insurance industry grow, more companies will understand the business purpose and true risk management benefits that a captive brings to its organisation. I anticipate that this greater utilisation will help us to overcome the persistent negative perceptions about our industry.

As the captives industry becomes a more significant part of the commercial market, we will have a broader knowledge of captives and that is a positive outcome.