From: Captive Intelligence
Rated captives continue to outperform commercial insurers in both underwriting and operating profitability, according to AM Best’s latest Market Segment Report.
The ratings agency data highlighted that the five year-average combined and operating ratios of captive insurance companies (CIC) outperformed those of the commercial casualty composite (CCC) by substantial margins.
CIC’s recorded five year combined ratios before dividends of 83.9%, compared with the CCC’s combined ratio of 98%.
Prior to 2022, premiums had been relatively flat, with a compound annual growth rate of just under 2%
“Lower premium growth has long been a feature of captives, as these companies have more control managing and monitoring their risks and setting actuarial pricing,” the ratings agency said.