A major distinction between the European captive insurance market and that in the United States is that historically the European market was largely made up of larger captives, according to a group of European captive insurance experts.
In addition to seeing fewer captives in Europe than in the United States, the market generally lacks participation by small and medium-sized enterprises (SMEs), according to Alexandra Gedge, senior captive consultant at Hylant.
Ms. Gedge and others discussed the European captive insurance market during a session titled “A View from Across the Pond” at this year’s Captive Insurance Companies Association International Conference.
Onerous captive regulatory requirements in Europe generally make it less practical for smaller captive insurance companies to operate, Ms. Gedge said. While in the United States a captive might be an efficient choice with as little as $100,000 in annual premium, in Europe prospective captive parents have typically looked at perhaps €3.2 million in premium to make captive insurance a viable choice.
Another panelist, Udo Kappes, head of P&C and reinsurance at Airbus SAS, suggested Ms. Gedge’s estimate might be on the low side. “I would say more like €5 million is probably a starting point,” he said.