As a result of a hardening traditional commercial insurance market, captive insurance use increased dramatically in 2020 and there’s no sign the trend is easing in 2021.
Speaking as part of a recent “Captive Trends and Data: What You Should Know” webinar presented by Marsh, Ellen Charnley, president of Marsh Captive Solutions, said there was historic growth in the number of captive insurance companies around the world in 2020.
“We had a crazy number of formations in 2020,” Ms. Charnley said.
Of the domiciles around the world in which Marsh manages captive insurance companies, 15 saw an increase of more than 20 percent in captive insurance premium volume in 2020, she said, so the trend of increased captive use is indeed global.
“The growth really was historic, unprecedented, more than double our best year ever,” said Michael Serricchio, Americas sales and advisory leader at Marsh Captive Solutions. The reason for it, he said, can be summed up in two words: challenged market.
“It’s really driving clients of all sizes, of all industries, all regions to think more about their property program, their excess liability program, [directors and officers (D&O)], products liability, products recall,” Mr. Serricchio said. “These are all lines of coverage that are just really giving a lot of pain points to clients, and there’s no doubt in my mind that that’s why we saw these historic formations in 2020. And that’s going to continue.”