From: Captive International US Focus
Whether addressing the hard market, emerging risks, economic volatility, or catastrophic risks, the captive insurance industry is set to harness the momentum for continued growth, says Dan Towle, president of the Captive Insurance Companies Association.
We are still seeing many of the same challenges in the insurance market that we have been discussing for the past few years. This perfect storm of market conditions and disruptions creates an environment where captives can thrive. Whether addressing the hard market, emerging risks, economic volatility, or catastrophic risks, the captive insurance industry is set to harness this momentum for continued growth. This includes greater utilisation of existing captives and more new companies forming captives.
This continued growth has boosted the role of captives, which now represent nearly 25 percent of the overall commercial insurance market, having transferred hundreds of billions of dollars in premiums from traditional markets in the last decade, according to EY. Once an organisation understands the benefits of captives, history has shown that the premiums stay in the captive market.
It has taken us 50 years to get to 25 percent, but with the growth we are seeing, it may only take us 15 years for captives to make up 50 percent of the traditional market. We are truly in the golden age of captive insurance.
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